IT is already hard for savers to get a decent return on their hard-earned cash, yet some banks and building societies are paying as little as 0.05 per cent in interest.
The Sun has found customers are being offered the low rates on easy access accounts, which means you’d get just £5 in interest on savings worth £10,000 over a year.
This comes after the Bank of England left the base rate – the UK’s official borrowing rate and the rate it lends to the other banks – unchanged at 0.75 per cent last week.
Easy access accounts mean that you won’t be charged for withdrawing your cash, unlike fixed-rate accounts where you will be charged a penalty for taking money out before the term is up.
Using data compiled by comparison site Moneyfacts, we’ve found accounts including Darlington Building Society’s instant access account, Bank and Clients’ personal saver and Al Rayan Bank’s on demand savings account are paying the low 0.05 per cent rates.
If you managed to deposit £1,000 in one of these accounts, you would only have earned as little as 50p in interest after a year.
And even someone with a decent chunk of savings wouldn’t see much better return, as a £10,000 balance would only boost your account by a fiver.
A majority of the worst accounts are offered by building societies, while HSBC is currently offering the lowest paying easy access account among the UK’s major banks, giving customers of its flexible saver account only 0.15 per cent in interest.
It’s closely followed by Bank of Scotland, Halifax, Lloyds, NatWest and Royal Bank of Scotland, which offer accounts paying just 0.20 per cent.
If you’re on of these accounts, you should consider moving it to one with a higher interest – some of which offer rates of 1.5 per cent.
Rachel Springall, finance expert of Moneyfacts, told The Sun: “Savers may wish to store their cash in a flexible account, but this shouldn’t mean leaving the money languishing in a poor-paying one.
“If savers were to instead move their cash to one of the best buys, they could earn 10 times more interest on the top deal versus the lowest on offer from a big high street bank.
“Clearly convenience costs so savers will need to rethink where they are storing their hard-earned cash.
“Some of the best deals on the market come from building societies or the more unfamiliar challenger banks, with the latter taking firm hold of the best buy tables, perhaps to remain consistently in the view of savers to draw in deposits for their future lending.”
What are the best savings accounts?
HERE are the best paying accounts currently on offer:
If you’re looking for the highest interest rates, fixed-rate accounts usually offer better rates than standard easy access accounts.
If you know you won’t touch the money for up to five years, it could be worth considering this as an option.
These are the best fixed savings accounts currently available:
The benefits of easy access accounts are that you can pay and withdraw money when you want, usually without being penalised.
These rates are lower than fixed-rate accounts, but it could be for you if you know you need to access your cash.
If you need an easy access savings, these are the best paying options to consider:
- Goldman Sachs’ Marcus: This offers the highest interest rate among easy access accounts at 1.5 per cent with a minimum investment of £1
- Virgin Money’s Double Take E-Saver: The account also pays 1.5 per cent on minimum investments of £1, but you’re only allowed two cash withdrawals per year
The Sun contacted all named banks and building societies for a comment, of which Darlington Building Society and Banks and Clients declined to comment.
A spokesperson for HSBC said: “There are a number of different factors that influence the interest rates of savings accounts and each provider will have their own reasons for the products they offer and the associated interest rates.
“Our savings accounts are competitive and cater for the different needs of savers.”
Many of the providers also stressed that they encourage customers to move their money into an account that’s right for them.
In April 2016, the Government introduced a big shake-up to something called the Personal Savings Allowance (PSA), which means basic rate taxpayers can now earn £1,000 in interest a year tax-free – in whatever account they’re saving in.
Are you looking for an Isa? We’ve put together a round up of accounts that offer the best saving rates.
Also see our round-up of the best children’s savings accounts for 2019.
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