You'd think that choosing a savings account would be the easiest thing in personal finance. After all, it is just a matter of running your eye down the interest rates on offer and sending your money off to the institution offering the highest-looking rate.
If only! The truth is more complicated. According to the Financial Conduct Authority (FCA), the regulator, more than 20% of savers earn interest at the Bank of England base rate or less so less than 0.5% due to the complications added to these simplest of products.
Think teaser rates and bonuses, special deals for new customers, accounts that only allow you to remove money on a few days of the year, and unadvertised cuts to old rates.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
If you opened a savings account with one of the big five providers five years ago, you can be almost certain that you are now earning one of the worst rates in the market: rates have been cut on more than 100 accounts so far this year alone.
What's to be done? The FCA has ideas: they say the banks should be forced to publicise their worst as well as their best rates and that alternative products should be "properly communicated to savers".
However, your first thought on hearing all this might be that instead of waiting for more rules, you should probably just check the comparison sites more often to make sure you are getting the best possible deal on your savings.
After all, on the FCA numbers, savers with 80% of easy-access accounts have not changed accounts in the last three years.
Not so fast. It turns out that the comparison sites aren't complete paragons of honesty either. As James Daley points out on fairerfinance.com, three of the UK's four biggest comparison sites are now owned by insurers, so "conflicts of interests abound" gocompare.com is owned by Esure, comparethemarket.com by BGL and confused.com by Admiral.
Some products are overpriced on the sites and commissions aren't always disclosed as transparently as they should be. This is not to say that you shouldn't use comparison sites.
You should before we had them, finding the best prices for insurance or the best rates for all kinds of savings was all but impossible. Today, spend a few minutes on the sites and you will discover that one of the best accounts to move your savings to is offered by the Kent Reliance building society (1.5%).
So overall, comparison sites are a force for consumer good. But just be aware as you use them that, like banks, they are businesses not charities. And all businesses need you, one way or another, to pay them for the services they provide.
