Are you happy with earning between 1.2% and 1.75% on your savings? I certainly wouldn’t be when prices are rising by 2.2% a year.
But these are the rates you earn if you leave your money in the standard easy-access account with the big High Street bank that handles your current account.
You may not even realize you’re getting a low rate and could be moved to a better deal thanks to the “confusing” and jargon-filled letters banks send you.
Low interest rates: Standard, easy-access current accounts at the big High Street banks pay between 1.2% and 1.75%
The watchdog warned last week that banks are sending us more emails and letters about our savings, but they are often “overloaded with generic information” and fail to tell us what rate we will receive.
The Financial Conduct Authority (FCA) has ordered them to improve their practices.
If you have deposited your money in one of these fake accounts, it means that you are losing purchasing power. And things are not going to get better, but worse.
Both the powerful Treasury Select Committee and the FCA have criticised big banks for paying abominable rates on savings accounts over the past 18 months.
Last week the FCA finally published its long-awaited update on the Cash Savings Market Review it launched last year. What a disappointing read!
Last July, the watchdog began investigating the appalling rates offered by some banks and building societies, naming and shaming the worst and telling them to do better.
As a result of its latest research, it boasts that the average savings rate in easy-access accounts has risen from 1.66 per cent in July 2023 to 2.11 per cent in June this year, generating an additional £4bn in interest.
The good news is that rates have risen by more than the Bank of England’s base rate increase, which has risen by 0.25 percentage points over the same time period.
But this is not enough when the cost of living is rising more rapidly.
Inflation hit 2.2 percent in the year to August and is eating away at their savings in these accounts, even after they have received interest payments.
All the big banks, who hold most of our easily accessible money, pay even less and still get away with it.
There are 277 easy-access accounts that beat inflation of 2.2 per cent, say data analysts MoneyfactsCompare.
The best paying accounts include Ford Money Flexible Saver and Dudley BS Easy Access Saver Online at 4.75 per cent, along with Close Brothers Easy Access and Secure Trust Access at 4.7 per cent.
Sy.morris@dailymail.co.uk
