What is the Bank of England base rate and why does it matter to me?

This is the interest rate the Bank of England charges on money lent to financial institutions. The Bank of England base rate can go up or down and is announced by the Bank of England's Monetary Policy Committee eight times a year.

Banks and Building Societies use the base rate when calculating their interest rates for some products. This may result in an increase or decrease to your interest rate.

What has the Bank of England base rate changed to?

On the 2 November 2017 the Bank of England voted to increase the base rate from 0.25% to 0.50%.

Click one of the following links to get more information on how this affects you.

What does a change in base rate mean for my savings account?

The Bank of England base rate is one of a number of factors we take into account when reviewing interest rates. Any change in the base rate will form part of ongoing rate reviews across our savings product range.

  • Variable rate products may be affected. When we confirm the changes to our rates, you will automatically get the higher rate.
  • Fixed Rate products will not be affected by this change.
  • Tracker accounts will change.

TSB regularly review competitor rates to make sure we are paying fair and competitive rates to our savings customers.

How will I know if the interest rate of my account is affected?

All variable rate savings accounts will be increased by 0.15% from 1 December. The only exceptions are Young Saver which will be increased by 0.25% and Junior Cash ISA which will remain at 3.00% tax free/AER variable.

Details of current rates can be found here.

How can I make the most of my savings?

We know that the current low interest rate environment makes it harder for you to grow your savings and the base rate change could prompt you to consider whether you could get more from your money.

We can help talk through your options in branch, or you can open accounts and manage your savings online.

My Fixed Rate Bond or Fixed Rate Cash ISA has matured, or is due to shortly, what does this mean for me?

If you had a Fixed Rate Bond or ISA and did not provide maturity instructions, your money will have transferred into either a matured funds account or Cash ISA Saver respectively, which now pays a variable rate of interest.

For up to date rates please pop into your nearest branch or look online tsb.co.uk/savings.

Find out how Bank of England rate changes can affect your mortgage here.

Who does the base rate change affect?

This only affects existing customers whose account is linked to the Bank of England base rate.

Why aren't rates changing immediately for credit cards?

Under our terms and conditions for existing customers with Bank of England base rate linked accounts, rates change on the last working day of the month following a base rate change.

Is my card base rate linked and is my account impacted by the base rate change?

Your statement sent after the month of the base rate change announcement will include a message about Bank of England base rate. This will tell you if your interest rate has changed. If there is no message on your statement, the account is not base rate linked and therefore the interest rate is not affected.

Why is my interest rate changing?

The interest rate is changing because your account is linked to the Bank of England base rate under the terms and conditions of the card.

How will I be notified of the change to the base rate?

There will be a message in the statement sent the month after the base rate announcement. This message will remind you that the rates charges have changed due to base rate. The statement will show when the minimum payment needs to reach the account by.

Will my interest change if the base rate changes again?

If you have a base rate-linked account then the interest will change every time the base rate changes.

See our "Important information about your credit card interest rate" leaflet.

Who does the base rate change affect?

This affects existing lending customers with overdrafts or loans linked to the Bank of England base rate.

Why aren't interest rates changing immediately?

Our lending product Terms and Conditions outline that any changes to the base rate will take effect on the first day of the following month.

Our Business Savings products are not directly linked to the base rate but we do normally review them following when there is a change. Following the increase in the Bank of England base rate in November 2017 we will increase the interest rates for the Client's Call and Designated Client Accounts to 0.10% on 1 December. This revereses the reduction made in August 2016 when the last change to the base rate took place.

The Business Instant Access Account interest rate will remain at 0.05% as the rate was not reduced in August 2016.

How can customers find out whether their business loan or overdraft is affected by Bank of England base rate?

All business overdrafts are affected by the base rate. For details of business loans affected by the base rate change, customers can contact the Business Banking Centre on 0345 835 3858, option 3.

How will customers be told about the change to their loan or overdraft?

Business customers with affected loan products will receive confirmation of their new interest rate in a mailing.

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