Returns cut from 1.45% on balances up to \u00a35,000 despite expected rise in Bank of England base rate<\/p>\n
Halifax has cut the interest rate it pays on its Kids\u2019 Saver account, despite expectations of an imminent increase in the Bank of England base rate.<\/p>\n
Savers into the account will have their returns cut from 1.45% to 1% on savings up to \u00a35,000. On balances above that the account will continue to pay 0.01%,<\/p>\n<\/p>\n
The change has already come into effect for new customers and existing accountholders will have their returns cut from 25 January 2022.<\/p>\n
The account was once a best-buy but other providers have already been offering better rates. According to Moneyfacts, several other high street banks pay a better rate on instant access savings for children, although most entail a parent or grandparent being an existing customer.<\/p>\n
The market leader is Santander, which is paying up to 3% on its 123 Mini Account, although it can be opened only by someone with a current account at the bank who has to hold it in trust for the child. HSBC\u2019s Children\u2019s Account pays 2.5% and is available to the children and grandchildren of its Premier Account customers.<\/p>\n
Halifax says the change follows regular reviews of its products, and that customers can get a higher rate on some of its other products.<\/p>\n
A spokesperson said: \u201cWe have written to customers with Kids\u2019 Saver accounts to let them know their rate will be changing.<\/p>\n
\u201cWe continue to offer a competitive range of accounts for younger savers, including our Halifax Kids\u2019 Monthly Saver at 2.5%, and make it easy for customers to check their rate on their account or move their money if there is a different account that is better for them.\u201d<\/p>\n
Monthly savings accounts do typically offer higher rates than those available on instant access, but requite a regular commitment to save and the headline interest rate is earned only on the early contributions.<\/p>\n