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Some offshore bank accounts failing to pass on full ECB rate rise

The gap between the average returns on Euro offshore savings accounts and the European Central Bank rate has widened to 0.70 per cent, according to Investec Bank.

Investec Private Bank’s Euro offshore savings index claims that between April 30 and July 31 2007 the average return on these accounts increased by 0.19 per cent compared to a rise in the ECB rate of 25 basis points.

On April 30, the average return on the Euro offshore savings accounts reviewed was 3.11 per cent gross interest, which was 0.64 per cent below the ECB rate of 3.75 per cent.

Investec says by July 31, the corresponding figures were 3.30 per cent gross interest and 4.00 per cent, a difference of 0.70 per cent.

Investec Private Bank spokesperson Laura Preston says: “When the European Central Bank rate changes, it is very interesting to see the response from other offshore banks on their Euro offshore savings accounts. Clearly, not all banks have increased their rates immediately in line with 25 basis point rise in the ECB rate in June.”

Preston adds: “Despite rates rising on Euro offshore savings accounts, there is still a huge disparity in the returns on offer and many people could benefit from switching to better paying accounts.”

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