We received a note today from our own bankers that our savings deposit interest rates are to be cut to just 0.01% pa from July 2020.
Now really is the time for us all to revisit our bank and building society savings.
It is no fault of the banks. Bank of England base rates are at just 0.10% pa and commercially banks are struggling with the fact that costs are still there, people are allowed to have mortgage holidays and banks must be flexible on loans, overdrafts and credit, in short they are making no money at all.
On top of this, the housing market is in virtual lockdown so there are very little new mortgages being applied for.
In the long term, banks must also prepare for the new minimum interest rate that must be paid on all savings rates, a standard savings rate, must ion the same way that you have a standard variable rate (SVR) on mortgages.
Do not ignore messages from your bank. They are likely to have bad news on interest rates and perhaps, even if it just a few pounds or a small % of your savings and investments, may be now is the time to look at risk based investments in particular given recent market falls, they could fall even further but eventually they will recover and you may get a better return than 0.01% provided you can accept the risk.