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.
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.
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 with four 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.