Leanne Macardle

Leanne Macardle

Editor
Published: 26/03/2019

It can be all-too easy for savers to get comfortable with their bank, yet this could mean they lose out financially, as those searching for a flexible home for their hard-earned cash will still not find the best rates with the biggest banks*. Many high street easy access deals pay paltry rates of interest, most not even beating the current level of base rate (0.75%) and certainly not coming close to inflation, showing once and for all that loyalty doesn't pay.

This becomes even starker when you realise that rates within the easy access market as a whole are actually improving. Indeed, the latest analysis by Moneyfacts.co.uk shows that the difference in interest that savers could earn between smaller brands and high street names is widening, with the top rate overall paying 10 times more than the lowest high street bank rate: Virgin Money and Kent Reliance currently pay the joint-top rate of 1.50%, whereas HSBC pays a measly 0.15%, which could equate to a difference in interest of £135 a year (based on a £10,000 minimum initial deposit).

The tables below highlight the split in the market, with high street banks notably absent from the top-paying deals:

Best overall easy access savings deals


Provider


Account

Gross rate at £10k

Virgin Money

Double Take E-Saver Issue 10


1.50%

Virgin Money

Man Utd Double Take E-Saver Issue 5


1.50%

Kent Reliance

Online Easy Access - Issue 33


1.50%

Marcus by Goldman Sachs®

Online Savings Account


1.49%


Tesco Bank

Internet Saver


1.46%

Yorkshire Building Society

Online Single Access Saver Issue 17


1.46%

Sainsbury's Bank

Defined Access Saver - Issue 8


1.45%

Cynergy Bank

Online Easy Access Account - Issue 22


1.43%

Shawbrook Bank

Easy Access - Issue 14


1.43%


Ford Money

Flexible Saver


1.42%

Deals available to new customers and may include a bonus. Source: Moneyfacts.co.uk

Big bank* easy access selection


Provider


Account

Gross rate at £10k


Bank of Scotland


Access Saver


0.20%


Barclays Bank


Everyday Saver


0.25%


Halifax


Everyday Saver


0.20%


HSBC


Flexible Saver


0.15%


Lloyds Bank


Easy Saver


0.20%


NatWest


Instant Saver Account


0.20%


Royal Bank of Scotland


Instant Saver Account


0.20%


Santander


eSaver (Issue 15)


0.40%


TSB


Easy Saver


0.50%

Deals available to new customers and may include a bonus. Source: Moneyfacts.co.uk

"Savers may well be storing up their savings in a flexible pot during times of economic uncertainty, but this shouldn't mean leaving the money languishing in a poor-paying account," said Rachel Springall, finance expert at Moneyfacts.co.uk. "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."

It could pay to think outside the box, but doing so doesn't mean that you're putting your money on the line. Challenger banks have the same kind of financial protection as their well-known counterparts, but because they're smaller, they actively need to compete for savers' cash – and you can benefit.

There's the chance that distance between the top rates in the market and those on offer from the biggest banks could grow further still, as challengers look to leapfrog one another to get to the top of the Best Buys.

However, as it stands there is little difference between the market leaders, but it's worth looking closely at the terms of each account before you make your decision, as not every easy access account is as flexible at first glance; Virgin Money for example allows two withdrawals on its 1.50% easy access account, whereas Kent Reliance pays the same rate with unlimited withdrawals, which could be more suited to those who want a truly accessible deal.

"Savers who are preparing to switch must also keep in mind that many of the top deals might not be around for long and may well require internet access, as many can only be opened online," concluded Rachel. "For example, ICICI Bank UK launched a rate of 1.54% in January that could only be opened online, but it remained on the market for less than a month – so speed is vital to secure some of the best rates seen this year."

So don't hang around! And definitely don't feel like you have to stay loyal if you want to secure the best savings rates – make sure to compare the options to see what else is out there, and don't be afraid to switch to a new deal, as it could make the world of difference to your savings pot.

*Banks selected for comparison are considered the biggest on the high street. This comparison looked at Barclays Bank, Bank of Scotland, HSBC, Halifax, Lloyds Bank, NatWest, Royal Bank of Scotland, Santander and TSB.

Deals shown are a selection of the lowest rates.

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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