While living costs remain high and disposable income dwindles, Britons have been searching for savings accounts that offer the best rate of return on their investments. Recent analysis indicates those opting for the bigger banks over challenger banks may be losing out, as most have easy access accounts paying far less than the top deals.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Convenience is costing savers who keep their cash stashed in an easy access account with a big high street bank.
“As the Bank of England Base Rate has risen all the way up to four percent, it is evident loyal savers have not seen the full benefits passed on to them.”
The Treasury Committee is currently seeking answers from various banking giants, including Barclays Bank, HSBC, Lloyds Banking Group and NatWest Group as to why specific easy access accounts pay much less than Base Rate.
Ms Springall added: “It will be interesting to see the responses, which are anticipated this week, particularly when challenger banks and building societies are increasing rates.”
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Savers who compare the top easy access rates will find challenger banks currently pay around three percent or more, and every brand has the same protections in place as the big bank brands do, being covered by the Financial Services Compensation Scheme (FSCS).
Comparing the easy access savings products offered by the banks considered the biggest on the high street, the highest gross interest rate available on savings of £10,000 and over is 1.19 percent with HSBC’s Flexible Saver (Standard).
Challenger bank Chip, on the other hand, is offering savers a 3.35 percent gross interest rate on deposits of £10,000 and over.
Ms Springall noted: “Every institution can have its own reasons and margins in place that leads it to assess its savings rates.
“Challenger banks and building societies may well prioritise offering a fair deal compared to the wider market and adjust their rates to cope with demand or other market influences.
“Mutuals may be worth considering, not just for their savings rates, but also for their principles and the support of local communities and charities.
“It will be down to savers to compare the rates on offer and move their money, so it is wise to review any accounts often and not presume they will see their rate rise in line with Base Rate.”
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Top easy access savings deals
- Chip Instant Access powered by ClearBank – 3.35 percent gross rate (£10,000+)
- Family Building Society Online Saver (5) – 3.2 percent gross rate (£10,000+)
- Zopa Smart Saver – 3.16 percent gross rate (£10,000+)
- Coventry BS Limited Access Saver (Online) (8) – 3.1 percent gross rate (£10,000+)
- Paragon Bank Triple Access Account (Issue 11) – 3.1 percent gross rate (£10,000+)
- Sainsbury’s Bank Defined Access Saver (Issue 40) – 3.07 percent gross rate (£10,000+)
- Secure Trust Bank Access Account (Issue 6) – 3.06 percent gross rate (£10,000+)
- Shawbrook Bank Easy Access – Issue 33 – 3.06 percent gross rate (£10,000+)
- Gatehouse Bank Easy Access Account – 3.05 percent gross rate (£10,000+)
- Buckinghamshire BS Triple Access Saver – 3.05 percent gross rate (£10,000+)
The next Bank of England Base Rate review meeting will be held on Thursday, March 23.