channel islands-based bank ups rate on two reserve accounts by 0.25% to match fed rate rise
Investec Bank (Channel Islands) has increased the interest rate paid to holders of both its US Dollar Direct Reserve and Inter Reserve accounts to 5%.
The move follows the Federal Reserve Bank's decision last month to increase interest rates by 25 basis points to 5%.
"Savers need to keep a close eye on the interest rates they are receiving and if they feel they are not competitive or fair, they should be prepared to switch to another provider."
Investec's Direct Reserve account offers dollar depositors a 32-day notice account with tiered interest rates depending on the amount deposited.
The rate rise of 0.25% will apply to all accounts containing $50,000 or more.
Investec's account was designed to always equal the base rates of the Bank of England, the Federal Reserve Bank or the European Central Bank (ECB).
Anna Malcolm, head of banking at Investec Bank, said: "Some banks and building societies have not been playing fair on the returns they provide on their dollar offshore accounts, when the Fed raises rates.
Investec has also launched its Euro Savings index. This tracks rates on euro offshore savings accounts and how they respond to movements in the ECB rate.
It found between 20 October 2005 and 22 March 2006 the ECB base rate increased by 0.5%, but the average rate of 36 euro-based offshore accounts only increased by 0.19%.
In October 2005, the average return on the euro offshore accounts reviewed was 1.46%, 0.54% lower than the ECB rate of 2%. By 22 March 2006, the rate was 1.65%, 0.85% lower than the ECB rate of 2.5%.
Malcolm added: "We launched this index in May to track movements in interest rates paid on euro-based offshore deposit accounts, which we hope will help savers and their advisers to decide whether they are receiving a fair and competitive return on their savings.
"Our initial findings highlight a worrying trend in accounts not responding fairly to changes in the ECB rate."
Investec increases rates on accounts in line with Fed rise
Euro savings index launched
Research shows trend for accounts not to respond to rate rises
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