Big banks snub savers with miserly rate rises despite making bumper profits on mortgage hikes
- Savers will only find the best rates at new banks and building societies
- The big banks, home to billions of pounds of our savings, still pay a pittance
- Only HSBC has edged up its rates on easy-access accounts from 0.01% to 0.1%
Big banks are still refusing to offer better rates on easy-access savings, despite cashing in on mortgage hikes.
Rates are rising, but savers will only find the best — of 0.7 per cent or more — at new banks and building societies.
The big banks, home to billions of pounds of our savings, still pay a pittance even though they have announced bumper profits for last year.
Double standards: The big banks, home to billions of pounds of our savings, still pay a pittance even though they have just announced bumper profits for last year
Only HSBC has edged up its rates on easy-access accounts; its Flexible Saver now pays a miserly 0.1 per cent, up from 0.01 per cent.
Halifax Everyday Saver and Instant Saver, Lloyds Easy Saver and Standard Saver, Barclays Everyday Saver, NatWest Instant Saver and Santander Everyday Saver still pay 0.01 per cent, even though the Bank of England base rate has gone up from 0.1 pc to 0.5 per cent since December.
Banks saw money pour in from savers last year, and want to boost the return they make on what they charge borrowers and the amount they pay savers.
The net interest margin (the difference between the interest banks receive and the interest they pay) at Santander is up from 1.63 per cent in 2020 to 1.92 per cent last year thanks to cuts it made on, among others, its 123 current account.
Balances of 123 accounts have grown by £58 billion. Yesterday, the bank said the 123 rate would go up from 0.3 per cent to 0.5 per cent this month.
At Lloyds Banking Group — which includes Halifax — the net interest margin rose from 2.52 per cent to 2.54 per cent and the bank expects a rise to 2.6 per cent this year.
Its deposits were up from £25.6 billion to £476 billion, while the amount in current accounts earning nothing jumped 14 per cent to £115 billion. NatWest now has £479.8 billion of our money and Barclays £260.6 billion.
While the banks pay just 0.01 per cent on their easy-access accounts — or £1 interest a year on £10,000 — you can earn 0.8 per cent with other providers, with the top rate coming from Cynergy Bank’s Online Easy Access Account last week.
Paragon Bank research shows 70p in each £1 in easy-access accounts languishes in those paying under 0.1 per cent.
With inflation at 5.5 per cent and the cost-of-living crunch taking hold, the gap between the big banks and other providers makes finding a better account worthwhile.
Other good online accounts come from Yorkshire BS at 0.77 per cent on £10,000, while Tandem pays 0.77 per cent and Atom Bank 0.75 per cent on £1. At Shawbrook you earn 0.72 per cent on £1,000 or more.
sy.morris@dailymail.co.uk
