Merryn's Blog

A simple way to fight the banks' dirty tricks - and get a better return on your cash

A new online savings platform can help you overcome your inertia about switching between banks, and get a much better return on your cash.

Financial journalists (me included) are forever nagging readers to keep an eye on their saving accounts and to move money around depending on rates.

We all know that bank profitability is intimately linked to client inertia: we put our money into an account we think is paying 3.5%; they wait until we aren't looking any more and cut the rate to 0.1%. But the sad truth is that we all hate admin. Moving bank accounts may take a tiny amount of time relative to the return we will get from it but it is still insanely boring.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

And that is why the banks keep getting away with their dirty tricks.

With this in mind I'm mulling over shifting some of my money onto the UK's first online savings platform, Governor. Sign up to this and you will get a single account (divided into Isa and non Isa cash should you wish) and a single log in as a client of the platform.

Advertisement - Article continues below

However, you will be able to deposit, monitor and transfer your cash around the accounts of participating providers with no extra admin at all. You'll also get alerts when any fixed rate deals come to an end (so you remember to log in and move your money on) and when any one of your accounts breaches the FSCS compensation limit.

That means that you can hold very large amounts of money in just one admin account, but still keep it all in separate banks and, therefore, safe. The company launched in April withfour providers on board all mutual. It has six now, and it hopes to have 20-odd by the end of the summer.

It is innovative stuff, and I suspect it could help most of us- however inert we might feel when faced with falling savings rates - get a much better return on our cash than we do now.With CPI inflation at 4.5% and the average return on a UK savings account more like 1.5%, that matters.



Personal finance

The benefits of sitting tight with your savings

Agreeing to lock up your cash can boost the interest rate on your savings significantly. Ruth Jackson-Kirby reports.
20 Aug 2019
Personal finance

Mini-bonds could spell big trouble for small investors

Investors have been seduced by the high interest rates on mini-bonds, but they’re not as safe as they seem.
11 Dec 2019
Personal finance

Don’t give your children toys for Xmas, give money

If you give your children or grandchildren fashionable toys for Christmas they’ll soon forget about them – so put some money to work for them instead.
26 Nov 2019
Personal finance

Beware of cash Isa scams

Fraudsters have been targeting savers by offering unrealistically high interest rates on cash Isas.
19 Nov 2019

Most Popular

House prices

The biggest risk facing the UK housing market right now

For house prices to stagnate or even fall would be healthy for the property market, says John Stepek. But there is a distinct danger that isn't going …
17 Feb 2020
UK Economy

How the BBC can survive the end of the TV licence

The TV licence that funds the BBC is looking way past its sell-by date, says Matthew Lynn. Here's how it could survive without it
16 Feb 2020

Money Minute Monday 17 February: good news ahead for the UK economy?

Today's Money Minute looks to a week in which we get the latest employment and inflation numbers, plus retail figures for January and a slew of eurozo…
17 Feb 2020

Is 2020 the year for European small-cap stocks?

SPONSORED CONTENT - Ollie Beckett, manager of the TR European Growth Trust, on why he believes European small-cap stocks are performing well.
12 Feb 2019