Partner Article

EU limits blamed as Northern Rock kids’ saver goes

NORTHERN ROCK has withdrawn its market-leading Little Rock savings account just one week after it launched.

The 5% three-year fix for children was heralded as the answer to the disappearance of child trust funds when it launched on 2 August.

However, Northern Rock officially withdrew the offering on Monday last week after being in action for just five days.

Despite the exceptionally short stay at the top of the children’s fixed rate tables, the Rock said that the move was part of ‘normal practice’.

An official spokesperson said: “Such adjustments are made all the time because European rules limit the deposits Northern Rock can hold. This is just another of those changes.”

Because the bank is government-owned, the EU will only allow it to have £20bn worth of money from savers accounts on its books at any one time.

The bank frequently has to monitor its deposit inflows by cutting, or scrap altogether, some of its more popular rates.

The 5% Little Rock savings account had proved to be one of those favourites, the spokesperson confirmed.

Elsewhere, Northern Rock cut the rates on its fixed products at the end of July. It took up to 0.25 percentage points of each to move them down the best buy tables.

And last week the bank has also scrapped its market-leading 3% one-year fixed Isa.

Northern Rock has said it could issue a new children’s savings account as early as the end of this month, but an official date has not yet been decided.

This was posted in Bdaily's Members' News section by Ruth Mitchell .