Avoid the major banks if you want a good, easily accessible savings rate
- The average rate paid on easily accessible high street accounts is now just 1.52%.
- The average rate for the top 50 easily accessible accounts is 3.63%
- TSB continues to pay only 1.35% for easy access
The data shows that major banks are far behind their rivals when it comes to raising easily accessible savings rates.
The average rate paid on easy access accounts on a balance of £5,000 at major providers Nationwide, Santander, First Direct, HSBC, Barclays, NatWest and Royal Bank of Scotland, Metro Bank, Bank of Scotland, Halifax, Lloyds, TSB and Virgin Money returned a paltry 0.07 percent on November 30, 2021.
That average is now 1.52 percent, but it’s far behind what savers can get elsewhere.
By comparison, the average rate for the top 50 easily accessible accounts was 0.46 percent at the end of November 2021, when the base rate was 0.1 percent, according to new analysis by Investec and MoneyComms.
Laggards: Many of the major banks are up to eight times behind smaller providers.
Now, with the base rate at 5.25 percent, the average rates for the top 50 instant access accounts sit at 3.63 percent, nearly eight times higher than before and more than 2 percentage points higher than the top banks. .
Best Buy’s easy-to-access account with Furness Building Society pays a 5 percent rate, and there are 25 accounts that pay more than 4.5 percent in our independent best buy tables.
Some of the big banks pay just over 1.5 percent on easy-access deals and have been put to shame by some of the smaller, lesser-known providers.
It means that overall, the top banks have increased their easy access rates by 1.45 percentage points since November 2021, while the 50 best buys overall have risen 3.39 percentage points.
Loyalty doesn’t pay so shop around for a better deal
Many savers remain loyal to the big banks despite the easily accessible low interest rates on offer.
Rachel Springall, Finance Expert at Moneyfacts, says: ‘Savers need to make sure they keep abreast of the changing market and switch if they get a raw deal.
“The savings market is benefiting from competition from providers within the upper end of the market, but also from consecutive increases in base rates, so it is vital that consumers take the time to compare the latest offers.”
Anna Bowes, co-founder of the Savings Champion website, says: “Big banks have long paid their long-suffering and loyal savers as little as possible, because they could.”
‘Many savers take it for granted that their trusted bank will take care of them and others simply haven’t had the incentive to move their cash.
‘Even if you wait, you’re much more likely to earn more if you switch and choose an account with a provider who’s willing to pay for their customer.
“It may be a provider you’re not familiar with, but as long as it’s regulated by the FCA and the Prudential Regulation Authority (PRA), your cash will be protected by the Financial Services Compensation Scheme, so you can also take a A well-informed leap of faith to earn what you deserve.’
David Hunt, head of retail savings at Investec, said: “Savers are benefiting from the base rate increases: the top 50 instant access accounts now pay an average of up to eight times more than before the increases began and fixed-rate savers up to six times more”. Better without.
‘Savers cannot simply trust their provider to increase the rate they receive, and yet they must be prepared to shop around and move their cash around if necessary. Even among the top 50 providers there are large differences in the rates paid.’
Last month, the Financial Conduct Authority laid out a 14-point action plan to ensure banks and building societies are fair in passing base rate increases on to savers.
