Plans to ban banks from “quietly cutting interest rates on cash savings accounts” could mean savers “pocket an extra £260m a year”, says Kalyeena Makortoff in The Guardian. The Financial Conduct Authority (FCA) will still allow banks and building societies to offer introductory savings rates but after 12 months the interest will fall to a rate set by the FCA for all easy-access savings accounts, rather than to a level determined by the bank.
“It will mean banks can’t hide behind a vast array of different interest rates,” Laura Suter, a personal finance analyst from AJ Bell, told The Guardian. But it does not mean savers will be able to stop having to shop around. The proposed rate is just going to level the playing field, not get you a good rate of return. Many accounts pay as little as 0.1% interest after introductory offers have ended, yet 65% of easy-access savings account have been open for five years or more. The Post Office, Halifax, HSBC and Lloyds all have accounts paying 0.1% interest. So, if your money has been in the same savings account for some time you should definitely move it. Cynergy Bank is offering an interest rate of 1.36% on its instant access account.
Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance.
Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.
Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.
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