Have big banks lost interest in savings? It’s three weeks since the base rate hike but easy access deal rates remain at rock-bottom
- Banks continue to turn their backs on savers with cash in easy-access accounts
- Experts predict that they will not raise rates even if the base rate rises further
- It means savers will continue to earn a derisory 0.01% on easy-access deals
It’s nearly three weeks since the Bank of England increased the base rate from 0.1 pc to 0.25 per cent — but not a single big bank is paying savers a penny more.
And there is no guarantee that they will as High Street banks continue to turn their backs on savers who have money in their easy-access accounts.
Two of the big banks are also now no longer interested in taking on new customers, instead allowing only their current account customers to open an easy-access savings account.
Experts predict that the big banks will not raise their rates at all this year even if base rate rises further, as expected
This is a complete turnaround from when these giants were keen to attract money and paid competitive rates.
Experts even predict that they will not raise their rates at all this year, even if the Bank of England base rate rises further —as experts expect.
It means savers will continue to earn a derisory 0.01 per cent on easy-access accounts with the big banks — Barclays, Lloyds (including Halifax), HSBC and NatWest (including Royal Bank of Scotland) – while other banks pay as much as 0.71 pc.
The big banks know savers will often simply open a savings account with their current account provider rather than seek out better deals, so they have no need to compete for funds.
And they are already awash with money, having benefited from £187 billion savings accumulated since the start of the pandemic and, before that, being able to borrow at rock-bottom rates from the Bank of England.
Despite their miserly rates, they have not seen any substantial outflow of funds.
Two of the big banks are also now no longer interested in taking on new customers, instead allowing only their current account customers to open an easy-access savings account
They hold around two-thirds of the total £974 billion sitting in easy-access accounts. James Blower, founder of consultancy Savings Guru, says: ‘Big banks have so much cash they have no need to put rates up at all this year and likely beyond that.’
He adds: ‘The best thing customers of the big clearing banks can do is switch to better accounts.
‘With the best rate at 0.71 per cent, there is a significant uplift on offer.‘
NatWest and RBS only let their current account holders open their Instant Saver accounts, paying 0.01 per cent.
The banks’ Digital Regular Saver, also exclusively for current account holders, pays a much better 3 .But you can only put in up to £50 a month and the most you can hold in the account is £1,000.
While it suits those looking to get on the savings ladder, it does little for people who have already built up a nest egg.
The Premium Saver and Savings Builder — both paying as little as 0.01 per cent — are also limited to current account holders.
HSBC, Barclays and Lloyds still allow you to open a savings account even if you do not have a current account with them.
But they, too, are not competing for your money — and are unlikely to do so soon.
They only pay 0.01 per cent, yet you can earn as much as 0.71 per cent with Investec Online Flexi Saver and 0.67 per cent with Shawbrook Easy Access account.
A NatWest spokesman says: ‘We are focused on our purpose of supporting our customers improving their financial capability. Part of that is helping 2 million of our customers start to save by 2023.
‘We will continue to develop our products to help customers thrive.’