Best savings rates 2024: banks that offer the best & worst deals

Studies find traditional names are paying lower interest rates than challenger banks.

Many traditional banks have still been paying savers meagre amounts of interest – despite warnings from MPs and regulators, according to research.

While popular high street names pay out less than 2% on instant access accounts, some challenger banks are offering almost 5%.

It means savers who don’t proactively review and switch accounts are being short-changed, according to Rachel Springall, spokesperson for Moneyfacts. 

“The convenience of leaving cash in an easy access account can mean missing out on higher interest rates elsewhere, so it is imperative savers ditch and switch to a better return,” she said.

Rate disparity during 2024

Prominent high street banks have been offering miserably low savings rates all year, according to research from Which?.

It found the disparity between their rates and those offered by challenger banks was the largest within instant access savings accounts. 

While major banks were averaging a mere 1.9% in January, newer rivals offered around 3.3%. Building societies, meanwhile, were averaging 2.9%.

By July 2024, major names such as Lloyds Bank, TSB and Barclays were all paying out less than 2%, while Cynergy Bank was offering 4.94%.

Which? also compared every provider's best instant access rate against one another every day between January and June. 

Over that period, most of the major banks ranked near the bottom: you can see the full breakdown of how they all fared in the table at the end of this article, including how long their top accounts were available for.

Leave closed easy-access accounts

The average closed easy access account rate has been lower than the live equivalent over the past two years, according to separate analysis by Moneyfacts.

That means savers who have moved their savings recently are enjoying more generous rates than loyal customers.

The research found the difference between the average closed rate and live rate on easy access accounts has widened from 0.08% in July 2022 to 0.31% in July 2024.

The average rate for an easy access account closed to new business is 2.82%, compared to the live easy access rate, which is 3.13%, pointed out Springall at Moneyfacts.

“Those with a balance of £10,000 could earn an additional £31 in interest over 12 months simply by switching, based on average rates, but they could be earning £500 a year if they have an account that pays 5%,” she added.

MP criticisms

The huge gap between providers exposed by the research comes despite criticism from MPs who wanted to know why rates were so much lower than the Bank of England’s base rate.

Last summer, Harriett Baldwin MP, Chair of the Treasury Committee, said: “With the Bank of England confirming the pass through of base rate increases to easy access savings accounts has been unusually weak, it’s clearer than ever that the nation’s biggest banks need to up their game and encourage saving.”

Baldwin also argued that the “measly easy access rates” on offer led MPs to conclude that loyal customers are being squeezed to bolster bank profit margins.

“We remain concerned that the loyalty penalty is especially prominent for elderly and vulnerable customers who may still rely on high street bank branches,” she added.

Ranked: instant access savings between January and June 

Source: Which?