Rates on closed savings accounts outperform | moneyfacts.co.uk

Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.

ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.


Lieke Braadbaart

Online Writer
Published: 19/11/2018
blue squares

The returns that are available on closed savings accounts, i.e. those no longer open to new customers, are exceeding the averages on open accounts, according to the upcoming Moneyfacts UK Savings Trends Treasury Report. This includes the average notice as well as no notice rates on all accounts except for ISAs.

"It has long been assumed that the rates paid by banks and building societies on their closed savings accounts are significantly lower than the rates they are offering on accounts open to new business," reported Darren Cook, head of Press at Moneyfacts. "However, analysis from the upcoming Moneyfacts UK Savings Trends Treasury Report looks to dispel this myth, as during the past three years (which is when closed savings data first started being recorded) the rates on these closed accounts have been superior on average to the rates paid on products currently open to new customers."

Average rate (excluding ISAs) Nov-15 Nov-16 Nov-17 Nov-18
CLOSED – no notice 0.76% 0.60% 0.44% 0.66%
OPEN – no notice 0.66% 0.41% 0.39% 0.64%
CLOSED – notice 1.24% 1.09% 0.91% 1.04%
OPEN – notice 0.87% 0.62% 0.69% 1.00%
Source: Moneyfacts Treasury Reports

As can be seen in the table above, the average rate paid on closed notice accounts stood 0.47% higher than the average on open accounts back in November 2016, while this month it only stands 0.04% higher. The average no notice rate on closed accounts, meanwhile, stood 0.19% higher in 2016, but only 0.02% above the average open account rate this November.

While new customers are no longer able to get a closed account, existing customers can continue to manage them and interest is still paid on what's left in these accounts. Yet that doesn't mean these accounts have to keep paying the same rate, at least when it comes to variable deals.

Because of this, Darren said "there may be a perception that savings providers generally rely on apathy among their customers, paying them reduced rates on their closed accounts, especially when the Bank of England base rate was at its historical low. However, this seems far from the case."

There's often been talk of savers' apathy and the dangers of sticking with a low rate for the sake of simplicity, but this new research implies that some 'staying put' can in fact be a good thing. However, Darren concluded that "since the Bank base rate has begun to rise, margins have started to narrow. If this trend continues and the Bank base rate continues to rise, the open savings account average may well become the dominant rate."

What next?

No matter what kind of savings account you have, it's always a good idea to review the rate you're getting on a regular basis. You may be lucky and get one of the higher-paying closed account returns, but you won't know this until you check your deal against the top savings rates currently available.


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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

blue squares


Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy