Press Release Summary: The credit squeeze is leading to higher savings rate. Some of the building societies are offering attractive rates to attract more deposits.
Press Release Body: London (Loans-Bazaar) November 22, 2007: The credit squeeze has upped the saving rates that many of the building societies were offering earlier. For the first time in last six years, you can now earn as much as 7 per cent on your savings.
Recently, there has been an increase in the cost of lending between banks. This has pushed the mortgage rates and is now leading to higher savings due to attractive savings rates. Building societies attracted exceptional levels of savings investment in the last month.
According to the latest figures from the Building Societies Association, more than £3,000m was invested in building societies in October 2007. The corresponding figure in October 2006 was £772m that is almost four times lower. Rachel Thrussell of Moneyfacts said: "Lenders are looking for alternative ways to fund their mortgage lending, and it seems as if increasing deposits has been the first port of call for many. A return of 7 per cent is quite outstanding." Commenting on the development, Adrian Coles, director-general of the Building Societies Association said: \"It seems that the majority of these deposits are funds withdrawn from the Northern Rock bank, with the attractive savings products offered by building societies continuing to appeal to customers looking for the best home for their money.\"
Building societies offer personal loans, mortgages on lower costs. There are more than 59 building societies in the UK.
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