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Virgin Money and Post Office Money had the highest average rates for easy access savings accounts at the beginning of July, according to research from Moneyfacts.co.uk.
The average rate of interest for easy and instant access savings accounts across 15 well-known banks and building societies was 0.58%. Both Virgin Money and Post Office Money were well in excess of this, with an average rate across their accounts of 1.26% and 1.25% respectively. However, the lowest average rates were from Barclays Bank at 0.28% and HSBC at 0.29%
One year on from the Financial Conduct Authority’s (FCA) price discrimination study, this research shows that there remains a wide discrepancy in the rates available for easy access accounts, and it could be that to secure a market-leading rate, you may have to switch your account.
Average easy access rates for 1 July 2019
Easy access analysis of 15 well-known brands versus market average rate
|Group||Product count||Lowest AER||Highest AER||Overall average AER||AER difference of overall average versus market average of 0.58%|
|Coventry Building Society||18||0.50%||1.20%||0.81%||0.23%|
|Leeds Building Society||4||0.50%||1.10%||0.77%||0.19|
|Lloyds Banking Group||13||0.20%||0.60%||0.39%||-0.19|
|Nationwide Building Society||8||0.10%||1.10%||0.50%||-0.08%|
|Post Office Money®||5||0.75%||1.38%||1.25%||0.67%|
|Royal Bank of Scotland Group||9||0.20%||1.25%||0.39%||-0.19%|
|Skipton Building Society||4||0.75%||1.15%||0.85%||0.27%|
|The Co-operative Bank||6||0.30%||1.40%||0.65%||0.07%|
|Yorkshire Building Society||13||0.00%||1.40%||0.72%||0.14%|
Range includes loyalty savers but not closed accounts, rates include all tiers. Source: Moneyfacts.co.uk
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Clearly, a huge difference in the interest offered to consumers across the most familiar brands remains, despite the FCA’s price discrimination study 12 months ago, which is why savers should consider switching to a better deal. Some savers may feel comfortable to leave their cash in an easy access account linked to their current account – but this convenience can cost them dearly.
“The biggest banks pay less than the current base rate (0.75%) on average, despite some brands offering inflated rates to larger deposits (RBS Group). The ordinary saver however will likely get less than base rate and, in fact, Barclays Bank and HSBC pay 0.30% and 0.29% respectively below the average easy access rate of 0.58%, which includes all rate tiers.
“As murmurings of a base rate cut persist, variable rate accounts will be the first type of savings accounts to see rates worsen, and the last two years of base rate rises will likely quickly unravel as a result – so there is even more reason for savers to shake off any apathy or loyalty and switch elsewhere.”
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