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Home > Statistics > Interest Rates and Banks' Average Interest Rates Frequently Asked Questions
 

Interest Rates and Banks' Average Interest Rates Frequently Asked Questions

This is a selection of the most frequently asked questions along with answers. The contents will be updated on an ongoing basis.

Quoted Interest Rates and Banks’ Average Interest Rates: If you require any further assistance on this subject contact us

I have noticed that rates for the same instrument in Bankstats Table's G1.3 and G1.4 differ. What are the differences between Bankstats table G1.3, average quoted household interest rates, and table G1.4 effective interest rates?

 

Differences arise between apparently equivalent series because of different coverage, source data and methodology. A summary is given below; more details are available in the explanatory notes.

The average quoted household interest rates in Table G1.3 are calculated from published rates for a sample of banks/building societies across a range of different deposit and lending products. For each product, individual lenders rates are weighted according to their market share. The end result is a weighted average quoted rate.

Banks' effective interest rates (Table G1.4) are compiled from a sample of banks that complete a monthly banking return. Average daily balances and accrued interest flows are provided for the whole of banks' deposit and lending business, broken down by sector and instrument. From this an annualised rate is calculated. The end result is a weighted average rate which covers all products available (stock and new business).
 

 

Are effective interest rates calculated on an IFRS basis?

 

No. Effective interest rates are reported as defined by the Yellow Folder and not by IFRS. If these rates were to be reported according to IFRS the effect of fees would then be taken into account. This would inflate those rates where there is often a fee applied, for example mortgage rates.
 

 

How are the differences between sight and time deposits defined?

 

Sight deposits are defined as credit balances on customers' accounts where the entire balance is accessible without penalty either on demand or by close of business the following day on which the deposit was made. Time deposits are not accessible on demand without a penalty being incurred.
 

 

Can you please explain the difference between the two effective credit card interest rates?

 

There is a rate for interest bearing balances only and a rate for all balances. The rate for all balances will include those balances which do not attract any interest because they are being paid off in full each month and those that are on a 0% interest rate deal.
 

 

Can you provide the base rate for my bank?

 

No. We cannot provide any information about individual institutions and would suggest that you contact the bank directly for this information.
 

 

Would it be possible for me to obtain a list of the general interest rates which have applied since October 1st 1989?

 

The link below contains the official Bank Rate history. You can download the entire series or select the appropriate year(s) by clicking on the output options.
http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp?Travel=NIxIRx

The average quoted household interest rates (Bankstats table G1.3) and effective interest rates (Bankstats table G1.4) may also be of interest and can be found using the following link. Please read the explanatory notes for these tables, which can also be found using the link below:
http://www.bankofengland.co.uk/statistics/Bankstats/index.htm
 

 

Does the Bank calculate an aggregate deposit rate that covers all types of household deposits?

 

No we do not calculate such a rate. We do calculate an aggregate sight deposit rate and an aggregate time deposit rate. These are effective interest rates that can be found in Bankstats table G1.4 or by using the interactive database. The links for both of these are below.
http://www.bankofengland.co.uk/statistics/Bankstats/index.htm

http://www.bankofengland.co.uk/mfsd/iadb/
 

 

Are there average interest rates available for Buy-to-Let mortgages?

 

Interest rates for Buy-to-Let mortgages are included in the effective mortgage rates. However we do not publish a series specifically for Buy-to-Let mortgages.
 

 

Where can I find interest rates data for other countries?

 

Interest rates for specific countries can normally be found on the central banks' website. For Euro area countries the ECB website can be used, please see the link to the statistical data warehouse below. http://sdw.ecb.int/browse.do?node=2018783

Alternatively the national statistics department for that country may have these data.
 

 

How far back do the ER and QR time series go back?

 

The effective rates data are available monthly from January 2004. However, high level stock effective rates data are available back to 1999.

The quoted rates data are generally available monthly from January 1995.
 

 

Why are Effective Rates lower than Quoted Rates for overdrafts?

 

The ER series includes non interest bearing balances which may result from a number of factors, namely: customers staying within their authorised limit, banks offering an interest free period, banks charging fees instead of a rate and non performing overdrafts not yet written off. Additionally the ER series series includes a range of differently priced products offered to existing and new customers. This contrasts with the QR series which reflects the rates payable on current accounts available to the broadest range of customers.
 


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