Savings rates aren't exactly setting the world on fire, and many people have been left wondering just where they can go to get a decent return. Well, it seems that building societies could be the sensible solution, with mutuals paying rates that far outweigh those from the main high street banks.
The figures speak for themselves. Our data shows that the main banks (which include Bank of Scotland, Barclays, Halifax, HSBC, Lloyds Bank, NatWest, Royal Bank of Scotland and Santander) have enforced multiple rate cuts in recent months, causing their savings accounts to drop lower and lower in the market.
However, building societies have used this to their advantage by offering savers a local alternative to the mainstream banks. We've compared the current savings offerings of building societies and banks and found that building societies are the irrefutable winners, as is highlighted in the table below:
Average Easy Access Rate
Average One-Year Fixed Rate Bond
Average Two-Year Fixed Rate Bond
Average Cash ISA
As you can see, the difference is marked, with building societies offering rates that can be as much as 0.58% higher than their big bank counterparts, so it could be time to look a bit closer to home if you're in need of a decent savings account.
"It's shocking that some of the UK's most well-known and trusted brands are paying savers dismal rates of interest," said Charlotte Nelson, finance expert at Moneyfacts, "but building societies are stepping up to the challenge. For example, the top-paying easy access account from a mutual, which comes from Skipton Building Society, pays 1.40%. Halifax, on the other hand, offers just 0.80% – a significant 0.60% less.
"There is a stark difference between what savers could earn from a building society compared with a main bank, and not only do mutuals come out on top when it comes to rates, but the gap between their deals and those from banks is getting wider. This gives savers a clear indication that they may need to look away from traditional banks to get the best deal."
Compare savings accounts
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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