The clock is ticking for savings providers. Now they have just a few weeks left to get to work and start offering a good deal to their loyal customers.
This is because, from July, new rules called Consumer Rights, which require all financial services companies to offer their customers “fair value”, will also apply to old savings accounts.
The regulations were implemented by watchdog the Financial Conduct Authority (FCA) last July, but savings providers were given a year to apply them to old accounts too. But, unfortunately, I warn you that this is not the time to breathe a sigh of relief.
But, unfortunately, I warn you that this is not the time to breathe a sigh of relief.
In fact, checking your rate regularly to make sure you don’t lose out will be as important as ever before and after the rule change.
Rule change: Starting in July, new so-called Consumer Duty rules, which require all financial services companies to offer their customers “fair value”, will also apply to old savings accounts.
To me, it should mean that providers should pay the same rate to loyal savers as they do to new ones.
Wouldn’t that make life a lot easier? But the FCA says it does not monitor prices and does not ask providers to do so.
In the run-up to the deadline, suppliers are working to change their products or come up with a methodology to demonstrate that they are offering fair value.
Meanwhile, many providers are still offering reduced rates to old customers and offering great deals to new ones.
Some offer the same rates to old and new ones. But that doesn’t mean customers get the best deals. And surprisingly, in some cases, old customers get better rates than new ones.
Check the best cash Isa rates in our savings tables
In the run-up to the deadline, suppliers are working to change their products or come up with a methodology to demonstrate that they are offering fair value.
Meanwhile, many providers are still offering reduced rates to old customers and offering great deals to new ones.
Some offer the same rates to old and new ones. But that doesn’t mean customers get the best deals.
And surprisingly, in some cases, old customers get better rates than new ones.
See what I mean about having to keep an eye on your fees to get a good deal: There’s no rule of thumb for determining which type of account will offer you the best value.
Among the worst is Virgin Money, which still gets away with paying as little as 0.25 to 1.75 per cent on some of its old, easy-access accounts.
If you’re unlucky enough to be in one, upgrade to a better deal.
Even if the bank raises rates before the new closed account rules take effect, they are unlikely to pay the higher rates. New savers to the bank on a similar account can earn up to 4.75 percent.
You may get lucky and find that you earn more than the rate offered to new savers.
There are 2,000 or more easy-access accounts that are now closed to new savers. If you have one of them, check your rate now.
Sy.morris@dailymail.co.uk
