High-street banks continue to offer poor savings rates – is your cash better off with a smaller provider?

Despite numerous warnings by the Financial Conduct Authority (FCA), savers are still being ripped off with low returns on high-street bank savings accounts. How much can your cash earn in a small bank?

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You could call this a ‘golden era’ for the savings market as you can currently earn above 5% on the best deals, but not for those who put their savings in a high-street bank, new data reveals. 

The ‘big five’ high-street banks continue to short-change savers, offering returns between 1% and 2% on easy-access accounts, amid numerous warnings by the FCA that they weren’t passing on base rate increases to its savings customers, Moneyfacts says. 

More recently, the FCA shone a light on these lenders offering low returns on accounts no longer on open sale- under a mere 1%. 

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James Hyde, spokesperson at Moneyfacts, says: “The FCA’s regulations around Consumer Duty directed financial services institutions to offer fair value and the big banks are still failing in some areas to meet those expectations.”

Which high-street lenders are still offering poor rates on their easy-access savings accounts, and would your cash be better off in a smaller bank? 

What are high-street banks offering on savings? 

New data from comparison site Moneyfacts reveals how much the big five high-street banks offer on their easy-access savings accounts. 

Swipe to scroll horizontally
ProviderGross rate on 10k balance
Barclays Bank 1.65%
HSBC1.98%
Lloyds Bank 1.4%
NatWest1.74%
Santander1.7%

All providers are offering rates below 2%, whilst the current Bank of England’s base rate stands at 5.25%. 

Santander slashed its easy-access rate some months ago from 2.5% to 1.7%- both rates still short changing savers compared to what’s currently on the market. 

The rates contradict the wider movement in the savings market as we’ve seen smaller savings providers up their rates in recent days.

Hyde adds: “As always, it is down to customers to proactively monitor savings rates and switch if they feel their loyalty is not being adequately rewarded.”

What can I earn on the top easy-access savings account right now? 

Hyde adds: “As always, it is down to customers to proactively monitor savings rates and switch if they feel their loyalty is not being adequately rewarded.”

What can I earn on the top easy-access savings account right now? 

After 14 consecutive base rate hikes, savings rates reached a 15-year high last year, but mostly from small bank providers and challenger banks like Starling. 

But since the BoE froze interest rates at 5.25% four times, MoneyWeek has seen savings rates fall as a result since November. 

That said, in recent days some smaller providers have upped their rates on easy-access savings accounts: 

  • Paragon Bank increased its rate from 5.05% to 5.16% on 15 February. 
  • Virgin Money upped its rate from 5.07% to 5.11% on 19 February. 
  • Monument Bank increased its rate from 5.08% to 5.11% today (20 February). 

Currently, you can earn up to 5.2% AER on the top easy-access saver account. Here are the top three accounts available. 

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ProviderRate AERMinimum depositWithdrawals
Cahoot5.2%£1Unlimited
Ulster Bank5.2%£5,000Unlimited
Paragon Bank5.16%£1,000Two withdrawals a year

The top three are all small providers compared to your typical high-street bank. Though, some small banks tend to be owned by big lenders. 

For example, Cahoot is a small division of Santander and Ulster Bank is owned by NatWest.

This compares to Paragon Bank which is its own entity. 

Understandably, you might be sceptical about putting your cash in a small, less reputable bank, and you might be wondering if your money is safe with them. 

Is your money safe with a small savings provider? 

Your cash is safe as long as the bank is regulated by the FCA and protects cash savings through the Financial Services Compensation Scheme (FSCS). 

The FSCS protects up to £85,000 of your savings should your bank or building society go bust. 

You can use this checker to see if the bank you save in or are looking to deposit cash in protects funds with the FSCS or not. 

Smaller banks that are divisions of high-street banks- such as Ulster Bank and NatWest- should be covered under the same FSCS protection. 

If the bank you are looking to save your cash in is not protected by the FSCS, we would advise against depositing your savings in the account. 

Vaishali Varu
Staff Writer

Vaishali has a background in personal finance and a passion for helping people manage their finances. As a staff writer for MoneyWeek, Vaishali covers the latest news, trends and insights on property, savings and ISAs.


She also has bylines for the U.S. personal finance site Kiplinger.com and Ideal Home, GoodTo, inews, The Week and the Leicester Mercury


Before joining MoneyWeek, Vaishali worked in marketing and copywriting for small businesses. Away from her desk, Vaishali likes to travel, socialise and cook homely favourites