Franky on Finance

Icelandic bank Kaupthing Edge has announced it will leave its savings rate untouched at 6.5% following the Bank of England base rate cut.  This is the second time it has decided to keep its top rate on hold despite base rate reductions.  Icesave, the UK savings arm of Landsbanki bank, followed in the wake of its Icelandic peer and also announced that it would retain the 6.05% rate on its easy access account.  Kaupthing stormed onto the UK savings market this year, but has since endured a tirade of unfavorable press after Morgan Stanley revealed its borrowing costs have increased 400% over the past year and analysts concluded it is 7.5 times more likely to default than any other European bank.  However, UK savers can take solace in the fact that their savings are covered up to £35,000, as well as the impressive guarantee on the Kaupthing account of 0.3% above base rate until 2012.