Are you getting less than 3% of your savings? Beware of low rates on closed transactions and opt for these better options

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The data shows that savers with closed easy-access savings offers are being disadvantaged if they do not switch to active easy-access offers.

Closed accounts are legacy accounts that no longer accept new money, and there are millions of people with money in them.

Rates on closed transactions have been lower than live easy-access rates for the past two years, according to rate checker Moneyfacts Compare, and savers could get much more by switching to new and better deals thanks to rising savings rates.

The difference between the average closed rate and the live rate on easy access accounts has widened from 0.08 percentage points in July 2022 to 0.31 percentage points in July 2024.

In July 2022, the average closing rate was 0.51 percent, while the average live easy access rate was 0.59 percent.

Currently, the average closing rate is 2.82 percent and the average live easy access rate is 3.13 percent.

The spread between the average easily accessible closed rate and the average live rate was largest in October 2023 (0.66 percentage points), when the average easily accessible closed rate was 2.52 percent, while the average live rate was 3.18 percent.

But savers need to shop around for the best deals on the market to maximise their interest rather than simply accepting what their big bank offers.

The largest banks are paying less than 2 per cent on their most flexible live savings accounts, which is lower than the overall average rates on live savings accounts and easy-access closed accounts of 3.13 per cent and 2.82 per cent respectively.

Rachel Springall, finance expert at Moneyfacts Compare, said: ‘Savers are being shortchanged if they don’t proactively review and change their closed easy-access accounts.

‘Over the past two years, the average rate on a live easy access account has exceeded the average closed rate, despite base rate increases from the Bank of England and numerous calls for larger banks to improve savings rates for existing customers.

‘Savers need to overcome their apathy about moving their funds, otherwise they will be disappointed when their loyalty is not rewarded.’

How to get a better savings rate

The simple message for savers is to switch to the best easy-access account on the market while rates are still high.

This is Money’s Easy Access Best Buy charts still feature easy access accounts that pay rates of 5 percent or more

Chase Bank has an easy-access account that pays a rate of 5.1 percent.

This is a rate boosted with a 1 percent bonus that ends on January 16, 2025.

The underlying rate is a variable rate of 4.1 percent that will fall when the Bank of England’s base rate is cut.

If you want to open a Chase savings account with an improved rate, you only have until July 17, 2024.

Chase’s Easy Access Account requires a checking account that savers can open in the Chase app. The Chase account also offers 1% cash back during the first year of account opening.

Oxbury Bank Easy Access Account It pays a rate of 5.1 per cent and has a high minimum deposit of £20,000.

This account can be opened online. It is an easy and limited access account, so it may stop being sold at any time.

Get a cash ISA for the best returns

Both Chase and Oxbury accounts are taxable and savers can keep more of their interest by taking out a cash ISA.

With savers paying more tax due to high interest rates and a frozen personal savings allowance, savers with larger amounts would do well to consider an easily accessible cash ISA to take some of their interest out of the hands of the taxman.

Savers must pay tax on interest above the £1,000 personal savings limit, but this limit is reduced to £500 for higher rate taxpayers and to zero for additional rate taxpayers.

Plum Easy Access Isa* It pays 5.17 per cent, making it the best overall rate for an easy-access cash ISA, but this includes a 0.86 per cent bonus for 12 months and those who make more than three withdrawals in a year see the rate drop to 3 per cent.

The other drawback of the Plum account is that it isn’t flexible. A flexible ISA allows you to take money out and put it back in without using any of your annual ISA allowance. The only caveat is that you must replenish the cash in the same tax year.

The best easy-access flexible cash ISA comes from Chip* by 5.1 percent, while Zopa pays 5.08 percent – ​​both are app-based accounts.

Paragon Bank ISA It is also flexible and pays 4.95 percent. It can be opened online, but only allows two withdrawals per year before the rate drops to 1.50 percent.

Yorkshire Building Society Easy Access Cash ISA* It pays 4.5 percent and is flexible, with no limits on withdrawals.

> Five of the best cash ISAs: Here’s Money’s pick of the best deals

James Blower, founder of website Savings Guru, said: ‘Markets are still pricing in a strong likelihood that the base rate will be cut to 5 per cent in August, if not almost certainly in September.

‘With this in mind, Best Buy’s rates seem overpriced right now and it seems like a saver’s market.’