Revealed: the savings accounts paying o% interest
The city watchdog has published a ‘name and shame’ list of banks and building societies paying 0% on cash savings accounts and it’s announced new comparison rules for providers that come into effect today.
The Financial Conduct Authority (FCA) today published its third and final report into the UK’s £700bn cash savings market, revealing that HSBC and First Direct pay 0% on closed accounts.
On cash savings accounts which can be operated in branch, the FCA list showed both Danske and Ulster Bank paid just 0.01% on both open and closed accounts at 1 October 2016.
Turning to ISA savings account which can be operated in branch, TSB paid just 0.05% on open accounts, while Santander paid 0.1% on open accounts and 0.25% on closed accounts.
As part of the FCA’s review of 32 providers, it found that in all accounts the median lowest interest rate is higher on open accounts than closed accounts. The median lowest interest rate is higher on accounts that can’t be managed in branch, compared with those that can.
New rules come into force today
The FCA also announced that, from today, new rules come into force requiring firms to provide easy-to-understand key information in an upfront summary box to help consumers compare savings accounts.
Providers will also have to clearly remind consumers about changes in interest rates or the end of an introductory rate. In addition firms will be required to provide a quicker and easier switching process.
In December last year the FCA indicated a move towards seven working day ISA switching and today it confirmed a target has been set so that 80% of cash ISA transfers will be carried out within that time period.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “The new rules coming into force today will help consumers get the facts they need to make an informed decision about what to do with their savings.
“In a well-functioning market, providers should be competing to offer the best possible deal to consumers. Our sunlight remedy data shows that some consumers could be better off by opening a different account. One of our regulatory priorities is the treatment of long-standing customers and we want to see all customers benefit from competition and innovation in financial markets.”