Northern Rock stops savings products

The international market turmoil has led Northern Rock to withdraw some of its savings products.

The bank is state owned and has had a rush of consumers looking for safe places to deposit their money.

This has placed Northern in danger of exceeding a 1.5 per cent cap on its share of UK retail deposits.

The nationalised lender said the recent turmoil in financial markets had led to a "sizeable" inflow of deposits, particularly in recent days.

Products withdrawn to new customers include Silver Savings, Silver Savings 30, Business Reserve and a range of fixed-rate bonds.

The move follows the recent withdrawal of Northern's fixed rate access bond and its online e-saver product. Northern has also amended its product pricing in order to uphold its competitive commitments.

It said: "The self-imposed framework is designed to ensure Northern Rock does not take unfair advantage of Government support during the period of temporary public ownership. As part of this commitment Northern Rock has capped its market share of UK retail deposit balances at 1.5 per cent.

"Northern Rock confirms that retail balances remain within this level."

Savers have also been flocking to banks such as Lloyds TSB and Abbey, which is owned by Spanish giant Santander, as well as to the Treasury-backed National Savings & Investments.

Further details on Northern Rock's trading will emerge on October 14 when the company is due to release a third quarter update.

The focus of this month's update will be on the state of the company's mortgage book.

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