Lloyds TSB International increases savings rates

Despite forecasting that the Bank of England base interest rate will not rise until mid-2014, Lloyds TSB International has increased the rates on its two, three and five year fixed-term deposits.

The bank’s own sales data shows that demand for one year FTDs has increased ten-fold in the three months to the end of November, as savers lock in to better interest rates in the medium-term until there is any prospect of base rate rises.

The market currently expects that the Bank of England won’t lift the base rate from its current record low until mid-2014.

Nicholas Boys Smith, Lloyds TSB International said: “Demand for short and medium term deposits has increased markedly over the past three months. Much of this is due to our improved rates in September, but we’re also aware that many expat savers are trying to make the most of flat-lining base interest rates and the expectation that these rates won’t increase for quite some time.

“In 2011 we saw a definite shift towards FTD accounts, particularly those with a one year term, but also those with longer durations,” Boys Smith continued.

“In this low interest rate environment, many people have realised they need to make some changes to ensure they’re getting a decent return on their savings.

“We expect demand for FTD accounts to continue rising, and with inflation forecast to fall in 2012, it won’t be long before FTD savers are making money in real terms.”