many on the deposit side.

The changes, which mean higher interest for savings accounts as well as higher credit card interest rates, follow a recent increase in the Bermuda dollar base rate. That move followed the US Federal Reserve's lead.

On March 31, all three Bermuda banks raised the base rate to 6.25 percent from six percent raising the cost of borrowing on average to 8.25 percent from eight percent.

"With the liberalisation of Bermuda dollar interest rates over the past several years, the level of the bank's Bermuda dollar base rate, and thereby interest rates for Bermuda dollar deposits and loans, were directly influenced by market conditions in the US,'' Bank of Butterfield executive vice president-group banking Colin Furr said.

So far, the Bank of Butterfield is the first to pass on better deposit rates from the latest base rate move.

The Bank of Bermuda said yesterday that deposit rates were still under review.

But it is anticipated that the Bank of Bermuda will also make deposit rate changes.

The Bermuda Commercial Bank said earlier that its deposit rates were likely to move up.

Among the Bank of Butterfield's changes were a quarter percent increase on Bermuda dollar call deposits and fixed rate deposits effective today.

Effective April 21, customers with Bermuda and US dollar savings accounts will get 3.25 percent and three percent interest rates respectively. Both are quarter percent hikes and apply to accounts with average daily balances over $1,000.

Butterfield Mortgage & Finance notice deposit rates, or time deposits, will also rise a quarter percent as will the rate paid for new fixed deposits between one and five years, effective today.

On lending rates, the bank said that all current consumer loans will remain at their present fixed rates for the lifetime of the loan.

But the bank's variable mortgages will be increased a quarter percent effective July 9 to 9.25 percent.

Customers with fixed rate mortgages are unaffected by the rate rise.

Existing customers with variable rate mortgages will be offered the opportunity in the coming months to switch to a fixed rate mortgage product, which offer the benefits of protection against further interest rate rises in the bank's variable mortgage rates.

Interest rates institution in Bermuda offering fixed rate alternatives to residential mortgage finance which affords valuable protection in a rising interest rate climate by ensuring that the level of mortgage repayments remain unchanged,'' Mr. Furr said.

Credit card borrowing cost across all the bank's credit card products will increase by 25 basis points.

VISA and MasterCard rates, most of which carry an interest rate of about 18 percent, will rise 25 basis points. The Island Card will jump 25 basis points to 9.25 percent.