Forget loyalty: the best savings deal can net you 100+ times more interest
Last month, the Bank of England raised the Base Rate from 0.25% to 0.5% and governor Mark Carney said he expected the banks to pass on the rise in the form of higher interest rates on savings accounts.
But research from Savings Champion has found that not all banks have passed on the full 0.25% rise.
As an example, Santander’s Instant Saver has gone from 0.01% to 0.10% – a rise of just 0.09% – and HSBC’s Flexible Saver rate is still languishing at 0.01%.
If these customers were to move their savings to the top-paying accounts without access restrictions (Birmingham Midshires Internet Saver at 1.45%), they can get 144 times more in interest in a year.
On a savings deposit of £85,000, that’s the difference in earning a pitiful £8.50 a year or £1,232.50.
Anna Bowes, director of independent savings advice site, Savings Champion, said: “Some providers will argue that they haven’t increased rates by as much as the base rate rise, because they are matching what they dropped them by last year, when the base rate was cut. But often that will be because the rate of interest they were paying was so low that they couldn’t actually cut by the full amount.
“Savers who fail to move their money from these accounts are allowing themselves to be robbed, as they are missing out on additional interest compared to the top-paying accounts.
“A general malaise has spread across the savings market because of the continual low rates of interest available. But savers need to realise that the high street banks are using this to offer them much lower rates than they can get elsewhere because of the feeling that ‘there is not much to be gained by switching.”