Savers guaranteed 0.5% minimum rate by a building society

A building society has pledged to give its savings customers a minimum of 0.5% interest.

Leeds Building Society is writing to its members to say it will pay at least 0.5% across both Isas and non-Isas.

This minimum rate is double the current Bank of England base rate, at 0.25%.

Leeds said its savings range should become clearer and more consistent for savers as a result of the changes.

The Society said the majority of its savers will receive a rate increase or see no change, although a minority will receive a reduction as a result of the shake-up, which involves bringing some closed-issue products into line.

Rachel Springall, a finance expert at Moneyfacts.co.uk, said some other savings providers pay savers as little as 0.01% interest.

She said: "It's great to see Leeds Building Society support its savers by offering a minimum return of 0.5%, as there are a few high street brands paying much less than this on their standard savings accounts."

According to Moneyfacts' figures, the average easy-access savings rate across the market stands at 0.4%, while the average one-year Isa pays 1% and a typical easy-access Isa will pay 0.63%. An average one-year fixed bond will pay 1.14%.

Ms Springall continued: "If savers are set on putting a lump sum away for a year's time, the average one-year bond is paying 1.14%, but savers will in fact find some brands paying almost 2% over this term.

"Savers would be wise to view the new 0.5% minimum rate like a bonus and be sure to regularly check their savings against the rest of the best buys to ensure they are getting a decent return."

Richard Fearon, Leeds Building Society chief commercial officer, said: "We've been working hard to help savers in a challenging low interest rate environment and are proud to be bucking the trend by raising rates for many of our existing savers at a time when a lot of our competitors have been cutting rates."