Loyal savers who have stuck with their high street banks are missing out on as much as 25 times more in interest compared with the best deals on the market.
The Bank of England raised the base rate by 0.25% in November this year and the changes for most accounts have finally been applied from 1 December. Yet this rise has not necessarily been passed on in full by the banks.
For example, Santander’s Instant Saver has gone from 0.01% to 0.10% - a rise of just 0.09%. But this is by no means the worst. HSBC’s Flexible Saver has increased by just 0.04%, leaving savers languishing on a paltry 0.05%.
Some providers will argue that they haven’t increased rates by as much as the base rate rise, because they are matching what they dropped them by last year, when the base rate was cut.
But often that will be because the rate of interest they were paying was so low that they couldn’t actually cut by the full amount.
As mentioned above, Santander has increased the rate on it Instant Saver by 0.09%, which is what it was it was cut by last year – but the new rate is now just 0.10% gross/AER.
Savers who fail to move their money from these accounts because of the feeling that there is not much to be gained by switching are allowing themselves to be robbed, as they are missing out on valuable additional interest compared to the top-paying accounts.
By moving from some of the lowest paying accounts, with the likes of HSBC and Santander, to the top-paying account without any access restrictions (RCI Bank Freedom Savings Account at 1.30%) you can get up to 25 times more in interest each year. On a deposit of £85,000, that is the difference of earning either £42.50 a year or £1,105 a year.
For the sake of filling in some forms, which might take you half an hour, you can get an additional £1,062.50 in interest each year.
If you were to base this figure on an hourly rate for the time it took you to make the switch, you would be hitting £2,125 an hour.
Now, if someone offered me that kind of wage, I would snap it up, so there is a very good reason to switch to a better account.
We understand it can be time consuming trying to keep up with the latest rates and top accounts, so sign up to our Rate Tracker service and let us do the hard work for you. All you would need to do is action a transfer from your existing accounts to get the benefit.
As always, if you would like more information on how to check for the best rates, give us a call on 0800 011 9705. We would love to hear from you.