for savers

The interesting guide to interest rates

Savings account interest – the most interesting thing about your savings

Every saver wants to earn as much interest as possible, but understanding how different aspects of interest rates affect your savings requires some attention to detail. Our guide below can help you get to grips with the basics.

With a savings account from The Cambridge you earn interest from the day you pay funds into your account until the day before you withdraw your funds.

We calculate interest on the balance of your account at the end of each day and it is paid annually.

Annual interest is paid on 31st December and depending on the account you choose it can be added to the balance of your account, transferred to another Cambridge account or to an external account with another bank or building society.

Interest will be paid at the gross rate with no tax deducted. Tax treatment and rate of interest payable will depend on individual circumstances and may change in the future.


Different types of savings interest rates

When choosing a savings account you'll notice there are a variety of interest rates available. Often the rate you're paid is linked to whether you're likely to need access to your money or can lock it away for a set period of time. Read on to find out more about the different types of savings rates.   

A Fixed rate is an interest rate that doesn't change during the product term, these rates are often higher because during the term of the product you will not be able to withdraw your savings.

A Variable rate has an interest rate that may go up or down, and accounts will normally allow you to pay in or withdraw your money giving you more flexibility with your savings. 

Tracker rates have a variable rate of interest, which could go up or down whilst you have the product. The interest rate will have an element that tracks another rate, this is often the Bank of England Bank Rate. The rate of interest you earn will change as and when the tracked rate changes.


Notification of interest rate changes

This is only applicable to savings accounts that have a variable rate of interest. When interest rates increase we'll advertise the new rates, within three working days of the change, in at least two local newspapers, by placing notices in our branches and on our website or within 30 days of the change, by letter, email or other personal notice. 

When interest rates reduce, we will tell you about it up to 14 days before we make the change by letter, email or other personal notice, except where accounts are below the minimum balance or if your account has less than £100 at the time the notice is provided.


Current interest rates

Interest rates may change depending on factors such as inflation, supply and demand and the general economic climate. You can find out what your current savings interest rate is by looking at our Savings products or you can take a look at our previous rates for variable savings accounts here.

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