Yesterday, the Financial Conduct Authority launched a new campaign, urging customers to compare deals to ensure the best savings rates on their deposits. And to save people time and money, TotallyMoney has crunched the numbers and highlights some of the best and worst places to put their money:
Below, we continue with tables for various savings amounts in different accounts, and provide commentary from Alastair Douglas and Andrew Hagger.
14 successive Bank of England rate hikes should’ve signalled good times for millions of UK savers, but banks were slow to pass the benefits on to customers, leading to the FCA setting out a sets out 14-point action plan§ on cash savings last summer, and following it up with a £600k campaign‡ to encourage savers to switch accounts earlier this week.
And while the cost of living crisis has meant 56% of adults have stopped saving, lowered their amounts, or used their deposits to meet their daily expenses, 37.1 million (70%) still have a savings account of some type. The majority (54%) of these are held with savings accounts, building societies or NS&Is, 28% in cash ISAs, and 26% in premium bonds¶.
However, 37% of savers haven’t switched for five years, and 27% have never switched, while just 52% of savers have switched, or plan to switch accounts#.
The tables below compare a variety of accounts, and the amount of interest paid out on various levels of deposits, including the mean average held in a UK savings account of £17,365.
| Product details | Balance and interest earnt per year | ||||||
| Account type | Bank/
difference |
Rate | £2k
balance |
£5k
balance |
£10k
balance |
Av. bal
£17,365 |
£20k
balance |
| Easy Access | Beehive Money | 5.16% | £103.20 | £258 | £516 | £896.03 | £1,032 |
| Barclays Everyday Saver | 1.66% (1.16% +10k) |
£33.20 | £83 | £166 | £201.43 | £232 | |
| Difference | 3.50%/4.00% | £70 | £175 | £350 | £694.60 | £800 | |
| 1 year fixed-rate bond | SmartSave | 5.26% | £105.20 | £263 | £526 | £913.40 | £1,052 |
| Ikano Bank | 3.20% | £64 | £160 | £320 | £555.68 | £640 | |
| Difference | 2.06% | £41.20 | £103 | £206 | £357.72 | £412 | |
| 90 day notice saver | StreamBank | 5.30% | £106 | £265 | £530 | £920.35 | £1,040 |
| Reliance Bank | 2.55% | £51 | £127.50 | £255 | £442.81 | £490 | |
| Difference | 2.75% | £55 | £137.50 | £275 | £477.54 | £550 | |
| Easy access cash ISA | Zopa | 5.08% | £101.60 | £254 | £508 | £882.14 | £1,016 |
| Barclays Instant Cash ISA | 1.66% (1.21% +10k) |
£33.20 | £83 | £121 | £210.12 | £242.00 | |
| Difference | 3.42%/3.87% | £77.40 | £193.50 | £387 | £672.02 | £774 | |
| 1 year fixed-rate ISA | Shawbrook Bank | 5.03% | £100.60 | £251.50 | £503 | £873.46 | £1,006 |
| AA | 2.90% | £58.00 | £145 | £290 | £503.58 | £580 | |
| Difference | 2.13% | £42.60 | £106.50 | £213.00 | £369.88 | £426.00 | |
| TotallyMoney research conducted by Moneycomms 27th February 2024 | |||||||
Both the Barclays EveryDay Saver and Easy Access Cash ISA pay a measly 1.66% on savings below £10k, and even less (1.16% and 1.21%) on anything over. For the mean average balance, this means earnings of £201.43, compared to £896.43 on the market-leading easy access Beehive Money saver, paying 5.16%.
For those looking to get a bit more for their money, the SmartSave 1 year fixed rate bond pays £913.40 interest on the average deposit — and if that seems like too long a time to lock away your money, there’s the StreamBank 90 Day Notice Saver, paying £920.35.
Alastair Douglas, CEO of TotallyMoney comments:
“In recent months, the UK’s biggest banks have banked billions of pounds and recorded record profits from charging high rates on debt while paying low interest on savings. And with inflation at 4% — still double the target rate — some are paying as low as 1.16%, meaning some deposits are losing value every single day.
“But millions of customers unwittingly think their banks are doing right by them, and a quarter haven’t switched accounts because they trust their bank. But loyalty doesn’t pay, and if you’re one of the 10 million people who’ve never moved their money, then the chances are your bank will have been profiting from paying you a pittance. So work out which savings option works best for you, and switch accounts to a provider who’ll help your money grow.
“While the regulator is right to campaign for people’s money to work harder, they should be pushing banks, not people to change. The role of the Consumer Duty is to set higher and clearer standards of consumer protection across financial services, requiring firms to put their customers’ needs first. Not vice versa.”
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