Don't let them short-change you on interest

Why should savers keep an eye on their account to see if their bank or building society has passed on last week's increase in the base rate? What difference will a 0.25 per cent in- crease in the interest make?

Why should savers keep an eye on their account to see if their bank or building society has passed on last week's increase in the base rate? What difference will a 0.25 per cent in- crease in the interest make?

Plenty, if inaction on the part of the finance house isn't a one-off. Numerous savings account providers have been found guilty of a sluggish response or failure to pass on the full amount of any rise to savers.

So it is worth being vigilant: if your provider is constantly short-changing you, consider moving elsewhere.

HSBC took just 10 minutes after the Bank of England raised the base rate to announce it was boosting the interest on its savings accounts by the full 0.25 per cent, though savers will have to wait another three weeks before this actually happens.

The delay will be even longer at Tesco Personal Finance . Customers in its instant access savings account won't feel the full rise until 22 July. From that date, the account will offer 3.35 per cent on £1.

At least these savers know where they stand. The Britannia and Skipton building societies and Alliance & Leicester said they were "watching the market" and would make a decision later this week.

Savers at Nationwide have more certainty, but that doesn't mean they'll be happy. Most of the building society's accounts have received rises of less than the full amount. Only four, including the e-savings account, got the full whack.

At Abbey, too, those with savings of more than £50,000 in its Investor 60 account will get a 0.2 per cent rise - part of the "trade off" for the full rate increase on every other account.

One way to ensure you don't miss out is to put your money, or at least some of it, in a tracker account that promises to match rate rises. Internet bank Egg will pass the increase on from 23 June as its account guarantees to match the Bank's base rate until the end of 2007.

Other savings accounts tracking the base rate pay out faster. Norwich Union and Barclays, for example, change their rate on the same day, though the interest is much less competitive.

Barclays' Tracker Savings account now pays 3.3 per cent interest on £10,000, while Nor- wich Union's tracker pays 3.9 per cent on amounts from £1,000. It guarantees to be within 1 per cent of the base rate until 1 January 2006.

Capital One's Tracker Plus account will pass on the full increase in just five days. Even without bonuses, it will match the base rate.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

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