Every week there seems to be yet another article about High Street banks closing branches.
According to the Daily Mail last week, High Street banks are shutting more than 10 branches a week across the country, with 550 set to go this year alone, which is leaving many people high and dry.
And whilst we can’t offer a solution to those who need to use local banking services, it is an opportunity to point out that if you already have savings with your so-called High Street provider, now is the time to move, as you are unlikely to be earning a competitive rate – and if there is no branch presence either, what’s the point in rewarding them when they do not reward you!
By moving your savings, you can make a real difference to the amount in your pocket – and if enough people vote with their feet, perhaps the banks will have to react?
There is little difference amongst the big High Street names – they are all as bad as each other.
NatWest and HSBC for example offer just 0.01% on their plain vanilla easy access accounts – that’s just £5 in gross interest a year on a balance of £50,000.
Sometimes the High Street banks will offer ‘loyalty rates’ if you are an existing customer or open a current account with them – for example Santander 123 current account holders could earn 0.70% on a 1-year fixed rate bond, as opposed to 0.50% for non-123 customers – but this still pales into insignificance, as the rate is less than half that you can earn elsewhere.
So, on that £50,000 you could be missing out on as much as £750 gross interest!
Nationwide is probably the pick of the bunch if you really need a High Street provider – they offer marginally better rates but, as a whole, still fall well short of the very best rates that can be found by shopping around and trusting a provider that you might never have heard of.
As long as they are covered by the Financial Services Compensation Scheme and you keep within the compensation limit of £85,000 per person, per banking licence, you’ve got nothing lose, but potentially substantial interest to gain.
If you’re not sure about an alternative place to deposit your funds, give us a call on 0800 011 9705 as we can help you find the best solution to your savings needs.