Interest rates for savers have been cut sharply by Lloyds, Halifax and TSB, following earlier cuts by other banks. A typical reduction is TSB’s top paying Classic Plus account moving from five per cent to three per cent interest. Changes have been blamed on market conditions, including the drop in Bank of England base rate to 0.25 per cent. A few accounts such as Club Lloyds will offer an improved rate to customers with low balances, and Nationwide has an attractive one-year offer on its FlexDirect current account, but it is getting harder for savers to find high returns.

Key Takeaways:

• Santander, Lloyds, TSB and Halifax have now all announced that they are going to cut the money paid out to their current account customers.
• Whether or not you move cash into savings depends on how much money you have.
• A more risky option is to lend savings via peer-to-peer lender.

“If you have £2,500 to £5,000 then the Lloyds Club current account offers the best interest on the market even at two per cent.”

http://www.theweek.co.uk/65280/lloyds-halifax-and-tsb-latest-to-slash-interest-rates