Internet Bank Egg delivers another blow to its customers after reducing the rate on their savings account to 5 percent from 5.5 percent. The online bank faces possible grilling by the Office of Fair Trading.

Egg doesn't seem to run out of surprises after the 0.25 percent reduction in interest rates the previous week and withdrawing credit cards that belonged to 161,000 customers who exceeded their credit limit and missed repayments. This also included customers whose credit profiles deteriorated after the online bank was acquired by the US-based Citigroup.

Until the end of 2007, Egg's internet account came with a guarantee that its before-tax rate would at least level with base rate. However, now that it has expired, loyal savers now suffer a 0.5 percent reduction from 5.5 percent (4.4 percent after tax) to 4 percent (5 percent). The online bank is facing a storm of criticism from its clients and a probe by the government after the cancellation of 161,000 credit count accounts (For more information on online banking, read The Guide to Online Commerce Banking). Some affected customers claimed that they have excellent credit ratings and have never gone over their limit.

This is the best time for foreign banks entering the British market. Customers looking for higher rates are expected to check out offers from Kaupthing Edge, which announced that it would be retaining its 6.5 percent saving rate. Icelandic “Icesave,” India's “ICCI,” Dutch-owned “ING Direct” and Nigerian-owned “FirstSave” will soon be penetrating the British market as well. If you're interested in reading this article, you'll enjoy learning how to invest in bonds to help the economy.