Banks cut savings rates

LLOYDS Bank has cut some of its savings rate. The Tessa rate drops from 5 to 4.75 per cent. Interest on Classic current account balances between pounds 1,000 and pounds 5,000 falls from 0.5 to 0.3 per cent, and all 30-day savings rates fall.

Midland Bank is cutting the interest rate on the top tier of its Exchequer savings accounts. Interest on sums over pounds 50,000 in the 30-day notice account, for instance, drops from 5.5 to 5.3 per cent gross.

Tynemouth building society has increased rates on its instant access Quay Account which pays 5.75 per cent on pounds 2,500 to pounds 5,000, then 6.25 per cent to pounds 15,000, 7 per cent to pounds 50,000.

TSB is issuing a second five- year bond with a 100 per cent money-back guarantee.

-------------------------------------------------------------------- SIX OF THE BEST -------------------------------------------------------------------- Savings -------------------------------------------------------------------- Type Account Term 0% 25% 40% Min GIB Financial Assurance 4 years 5.65 5.65 4.80 pounds 50,000 B Soc Coventry Instant 7.10 5.33 4.26 pounds 25,000 Tessa Hinkley & Rugby 5 years 7.60 7.60 7.60 pounds 3,000 -------------------------------------------------------------------- Compounded annual rate except for GIB (guaranteed income bond) Source: Chase De Vere 071-404 5766 --------------------------------------------------------------------

-------------------------------------------------------------------- Mortgages -------------------------------------------------------------------- Type Source Deal Variable Northern Rock* 3.5% discounted rate on 90% loans Fixed Leeds 6.75% for five years on 80% loans Capped TSB 7.25% on 95% loans for 5 years -------------------------------------------------------------------- *Arrangement fee of pounds 150. Household and contents insurance through Northern Rock. Source: John Charcol 071-611 7000 --------------------------------------------------------------------