Barclays customers warned 'move your account' before next week after rule change
The high street bank is lowering the rate on its Rainy Day Saver account for the second time in four months.
Barclays is set to make a big change to bank accounts in days - impacting thousands of customers. The high street bank is lowering the rate on its Rainy Day Saver account for the second time in four months.
On May 5, the interest is set to lower again to 4.61% .Interest rates on the Rainy Day Saver are banded. This means you’ll earn 4.87% AER/4.76% gross p.a. interest on the first £5,000 of your balance, and 1.16% AER/1.15% gross p.a. on your additional balance over £5,000.
If you offset your savings account against your mortgage, you won’t earn any interest on your savings account. Rates are variable. Interest is calculated daily using your statement balance and is paid on the first working day of each month.
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Interest is paid gross. If you’re a UK taxpayer, you may have to pay tax on interest earned in excess of your Personal Savings Allowance. Barclays explains: "You’ll earn the most interest with this account by using it to save up to £5,000.
"If you want to save more than £5,000, you could put £5,000 in this account and any additional money in a different account that will pay a higher interest rate. You could explore our Blue Rewards Saver or our range of cash ISAs and fixed-rate bonds.
"If you’re saving for the long term, you could explore your investment options with us. Investments may offer higher returns than cash savings in the long term."
To open this account, you need to be a Barclays Blue Rewards member or a Premier Banking customer, 18 years old or over and a UK resident. The latter requires a high £75,000 annual salary, so for most people, access will come via the Blue Rewards package which you can sign up for with the Barclay’s standard current account.
Personal finance experts at Be Clever With Your Cash explain how Barclays customers are better off elsewhere, saying: "It’s clear cut if you are only paying the £5 a month for Blue Rewards to access the 4.61% paying account. A resounding no.
"Existing customers who were getting the 4.87% rate until now are better off closing Blue Rewards and moving their savings to an account elsewhere that pays more than the effective 3.56% you’re getting (at best) with the new rate."