Halifax, Santander and Lloyds all have savings accounts so shameful that I urge you to check if you hold your money in one – and if so move it straight away.
The three accounts I am calling out today are Halifax Instant Saver, Santander Everyday Saver and Lloyds Easy Saver.
All pay a disgraceful 1 pc on your savings. That means that your savings are rapidly shrinking because the interest you earn is far less than the 3 pc or so rate at which prices are rising over a year. You may be in one of these accounts even if you didn’t actively open one.
That is because the big banks lure you in to one of their top accounts with a bonus rate.
Then after one year, the bonus expires and they dump you in their awful account that pays around 1pc.
For example, Halifax’s Instant Saver is not on general sale. But your money ends up here once you have been in its easy-access accounts – such as Everyday Saver, Reward Bonus Saver or Bonus Saver – for a year.
Even if you have £25,000 in this account (who has?), you earn just 1.05 pc and at £100,000 it’s 1.1 pc.
Halifax, Santander and Lloyds all have savings accounts so shameful I urge you to check if you hold your money in one – and if so move it straightaway, writes Sylvia Morris
Halifax, Santander and Lloyds are the worst by a whisker, but really NatWest is almost as bad as its Flexible Saver pays 1.06 pc on up to £25,000, and Barclays too with its Everyday Saver that pays 1.05 pc.
Even the best among them HSBC Flexible Saver only pays 1.15 pc from £1.
These rates could get even worse and drop below 1 pc if the Bank of England cuts its base rate, as widely expected, to 3.75 pc from 4 pc tomorrow. You could get a reprieve for a month or so if it holds off the cut, but with the general level of interest rates expected to fall, yours will go down too at some point soon.
When you look at basic savings rates with big banks, it is hardly surprising that so much money – a huge £300 billion – is left earning absolutely nothing in current accounts. After all, what is the point of moving your money from your bank’s current account to its savings account if you’re only going to earn 1 pc interest.
But if you are willing to snub your current account provider’s offerings, there are plenty of top savings accounts available.
Money can flow to and from your current account using faster payments – so it is in your current account within two hours and often straight away.
It is simple to switch – just open up a new account with a better-paying provider (it takes around 10 minutes). You link the account to your current account and use it to move money from your dismal savings accounts to your new account.
It will be worth it because you can earn around four times as much. Among the best payers is Spring, an app-based account run by Paragon Bank.
If you are willing to snub your current account provider’s offerings, there are plenty of top savings accounts available
It pays 4.11 pc. The rate is likely to fall if base rate does, but it will still be way ahead of what you get from the big banks.
You can earn more – 4.4 pc – with Cahoot (part of Santander) Simple Saver but you need to make a diary note to switch after 12 months.
The account only lasts for a year. After that, you are moved to Cahoot Savings account, which pays 1 pc.
If you want to stick to the High Street try your local building society. Among the best Skipton pays 4pc on its Bonus Saver but once again look to move again after a year.
Family Building Society Market Tracker pays 4.14 pc – dropping to 3.98 pc next month. It sets its rates every three months to pay the average of the top 20 payers. You can open it online, by post or in its Epsom branch.
You can earn 4pc instead with Skipton
Skipton Building Society came out with a new issue of its Bonus Saver last week.
Available online or in its branches, it pays 4pc including a fixed bonus of 1.7 percentage points for a year.
It’s a decent rate for an easy-access account from a High Street provider.
But you need to make a diary note to switch your money to a better account when the bonus runs out.
What surprises me is that you can only open it in one name – and not as a joint account.
These joint accounts are popular as we save for weddings or holidays or even to build up an emergency fund.
You can’t open a cash Isa in joint names. But it is unusual for a building society to not allow joint accounts on regular easy-access accounts.
Another thing we have to check when looking for an account. Will others follow suit?
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Read More: It’s shameful the Big 3 banks are offering these accounts. If you’ve got one