Passbook savings accounts interest rates slashed

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Passbook savings accounts interest rates slashed

Mon 12th Jan 2009

Holders of passbook savings accounts are paying for their paperwork as savings providers are offering them lower rates of interest, research released today has revealed.

According to MoneyExpert.com, which conducted the research, the number of passbook accounts offering interest rates lower than the Bank of England's base rate has "rocketed", with 44 per cent now paying less than one per cent interest.

Passbook accounts, which are popular with pensioners, pay an average of 0.22 per cent less interest than ordinary instant access savings accounts.

Sean Gardner, director of MoneyExpert.com, said: "Many older savers like and value the security and certainty offered by a passbook with their savings account.

"But for banks and building societies there is a cost in providing passbooks and they prefer to deal over the internet or phone."

Mr Gardener added that savers who ask for passbooks are being charged and it is "not a price worth paying".

Recently Age Concern called for the government to launch economic reforms aimed at pensioners, as it claimed that they are being hit hard by the credit crunch.

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