Building societies trump banks in savings rate battle
Over 80% of building society accounts pay more than the 0.25% Bank of England base rate, compared to just 58% of accounts held with banks, according to the statistics from Savings Champion.
The rate tracking firm said the average live variable rate from banks has halved in the last five years.
Throughout 2016, building societies, on average, paid significantly higher rates than their banking counterparts – 1.09% versus 0.81%.
Savings rates have tumbled in recent years especially since the introduction of the government’s Funding For Lending scheme in 2012 and Term Funding Scheme last year. These schemes provide banks with access to cheap funding, which means they no longer have to compete as fiercely for savers’ deposits.
Susan Hannums, director at Savings Champion, said: “These figures highlight some of the stark differences between the two types of provider, with building societies demonstrating a greater commitment to treating their customers more fairly than some of their banking counterparts.
“Whilst there are exceptions within each group, in particular the challenger banks, which continue to support savers with better rates on offer for those looking to open accounts, on the whole the figures tell an interesting story for customers of both groups.”
She said traditional banks continue to demonstrate their reluctance to encourage both new and existing customers to put their money with them and those who hold low-paying accounts with them need to switch to a better alternative.
Best building society savings rates
|Easy Access||Leeds Building Society||Limited Issue Online Access Account||1.05%||1.05%||£1,000||£250,000|
|West Brom Building Society||WeBSave Bonus Saver 2||1.05%||1.05%||£1,000||£250,000|
|Coventry Building Society||Easy Access Saver (4)||0.85%||0.85%||£1||£250,000|
|Variable Rate ISAs||Teachers Building Society||Cash ISA Notice 90 (Issue 6)||1.05%||1.05%||£100||£100,000|
|Coventry Building Society||Easy Access ISA (5)||0.90%||0.90%||£1||£15,240|
|Children’s Account||Saffron Building Society||Children’s Regular Saver||4.00%||4.00%||£5||£1,200|
|Junior ISA||Coventry Building Society||Junior Cash ISA||3.25%||3.25%||£1||No Maximum|
|Help to Buy ISA||Buckinghamshire Building Society||Help to Buy: ISA Issue 2||2.25%||2.25%||£1||No Maximum|
Worst bank savings rates
|Royal Bank of Scotland||Instant Saver||0.01%||0.01%||£1||£49,999|
|HSBC||Flexible Saver – Preferential rates||0.05%||0.05%||£1||£1,000,000|
|Closed||HSBC||Instant Access Savings||0.01%||0.01%||£1||£10,000,000|
Source: Savings Champion. Data correct as of 20.2.17