As a group, building societies continue to outperform banks in a number of key areas, figures produced by Savings Champion has shown.
Significantly more building society accounts (81%) pay a higher interest rate than the base rate in comparison to banks (55%), a trend that was apparent throughout the last five years and has continued into 2017.
Whilst rates throughout the market have continued to fall over the last five years, particularly following the base rate reduction nearly a year ago, the average variable rate paid by banks has dropped by nearly 10% more than the average paid by building societies in that time.
In fact, during 2017 the average interest rate paid by building societies is nearly a quarter of a percent higher than the banks, showing a clear gap between the two groups.
Anna Bowes, Director at Independent Savings Advice site Savingschampion.co.uk says: “These figures speak for themselves and show that, on the whole, building societies are showing greater support for their customers with higher interest rates and a greater commitment to treating customers fairly.
Of course, there are exceptions within each group, with the challenger banks of particular note, driving competition in the savings market and dominating the best buy tables.
It is also worth noting that whilst challenger banks are pushing the averages up, the same cannot be said of the big high street names, who are amongst the worst culprits for poor interest rates. A significant portion of funds within the savings market are still languishing in uncompetitive accounts, with some of the worst rates found on the high street, so now is the time for savers to look for an alternative.
It remains vital to keep an eye on the best rates on offer and grab them when you can. Savings Champion is here to support savers and make this task easier with independent best buy tables and the Rate Tracker service, where savers can check the interest rates on their accounts for free.
As always, our advice is to vote with your feet and improve your returns by switching to a better deal. Don't accept low-paying accounts and rate cuts”.
Average interest rates based on £10,000 invested, including all live and closed variable rate savings accounts.