Capital G has announced a rate cut for its US dollar savings accounts and investment accounts.

Capital G vice-president of marketing Andrew Vaucrosson said the cut - which saw rates fall by as much as half a percent - was in line with the US Federal Reserves latest cut.

On November 6, the Fed cut the interest rate for overnight funds for the tenth time this year, by 50 basis points to two percent.

It generally cuts interest rates when inflation is subdued and the economy needs a boost. It began what is now seen as an "aggressive rate-cutting campaign" in January of this year in an effort to reverse the economic slowdown. There have been three cuts since the September 11 terrorist attacks.

Mr. Vaucrosson said he believed there could potentially be room for the Fed to cut rates even further. He called the cut in the interest rate for fed funds - at 4.5 percent since January - "incredible."

At the time of making the last cut - which brings the fed fund rate to its lowest level since 1961 - the Fed said it was making the cut amidst "heightened uncertainty and concerns about a deterioration in business conditions both here and abroad (which) are damping economic activity."

The Banks of Bermuda and Butterfield did not cut rates following this month's Federal Reserve rate cut but both lowered their base rates in September.