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Just over a month after the base rate rise, it seems that banks have finally followed suit and raised their own savings rates. This means that savers will finally see some positive change in the variable savings market as many of the biggest brands have revamped their ranges, but has the wait been worth it?
While many may assume it's worth celebrating, our latest research can reveal that not all savers will be delighted, as some of the more popular deals have not had the full 0.25% Bank of England rate rise passed on. In fact, the average easy access rate has only risen by a pitiful 0.07% in the last month, from 0.39% to 0.46%, and even those banks who have offered the full 0.25% rise can still be easily beaten by alternative brands, as challenger banks continue to dominate the Best Buys.
Indeed, as the tables below show, some of the best easy access accounts offered by the big banks still pay paltry rates of interest - as low as 0.10%, in some cases - and the section below all failed to benefit from the full 0.25% rate rise. Compare these rates with those available from challenger brands, many of whom have passed on far bigger rate rises, and you'll soon see that these smaller banks are still well worth considering.
|Bank||Account||Gross Rate £10k||Rate rise|
|Bank of Scotland||Access Saver||0.20%||0.15%|
|Barclays Bank||Everyday Saver||0.20%||0.15%|
|HSBC||Online Bonus Saver (no withdrawals)||0.45%||0.20%|
|Lloyds Bank||Easy Saver (new customers)||0.20%||0.15%|
|NatWest||Instant Saver Account||0.10%||0.09%|
|Brand||Account||Gross Rate £10k|
|BM Savings||BM Internet Saver||1.45%|
|Virgin Money||Double Take E-Saver Issue 2||1.36%|
|RCI Bank UK||Freedom Savings Account||1.30%|
|Bath BS||Direct Saver||1.30%|
|Bank of Cyprus UK||Online Easy Access Account||1.25%|
|Nottingham BS||eSaver Instant Issue 8||1.25%|
|ICICI Bank UK||HiSAVE SuperSaver Savings Account - Bonus||1.24%|
|Post Office Money®||Online Saver Issue 27||1.22%|
"It's now been a month since the Bank of England increased base rate by 0.25% and savers have had to wait with bated breath to find out if they will benefit," said Rachel Springall, finance expert at moneyfacts.co.uk. "Unfortunately, while plenty of rate rises have now been announced, some savers will find that they haven't benefitted from the full 0.25%; savings providers appear to have been very selective about which accounts get the full rise."
If you've found that your high street easy access account is still paying very little, it may be time to look elsewhere. "Since the start of November, there has been some decent competition among the challenger banks looking to entice new savers," said Rachel. "While the big banks dragged their heels on savings rate increases, challengers have taken the opportunity to shine.
"Just last week BM Savings increased the rate on its easy access saver to 1.45%, which is the highest return in this market since August 2016. Virgin Money also jumped on the rate rise bandwagon, increasing the rate on its easy access deal to 1.36%, the second-best in the market. If savers don't take advantage of the current deals fast, however, they could find that they miss out on the best returns available in over a year.
"The best deals don't tend to stick around for too long. A good example of this is Paragon Bank, whose limited edition easy access account paying 1.31% had a short shelf-life of just over two weeks. Similarly, Bank of Cyprus UK had an easy access saver paying 1.35% which was reduced after just three days.
"Unsurprisingly, the biggest high street banks seem to be missing entirely from the top deals in the easy access market. The convenience of keeping cash in these accounts means that savers may be missing out on vital interest, so they would be wise to consider the more unfamiliar brands instead to make their cash work harder."
Don't put up with a poor-paying account - find the best easy access deals using our Best Buys and see if you can beat the big banks.
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