FCA reveals UK's worst savings accounts
The Financial Conduct Authority names and shames the providers paying little to no interest on their savings accounts.
Savers are getting interest rates as low as 0% on their savings accounts, according to the Financial Conduct Authority (FCA).
Data from the financial watchdog reveals the lowest rates from 32 firms offering easy access savings accounts and easy access Cash ISAs available on April 1 2016.
The worst offenders include the Post Office, which offers an unfathomable 0% on its in-branch accounts, closely followed by Danske Bank and Ulster Bank at only 0.01%.
This is the second round of naming and shaming from the FCA, with the aim of standing up for loyal savers who so often are landed with poor rates at the expense of new savers.
Losing interest
Here they are – some of the worst easy access savings accounts around. How does your bank stack up?
Source: FCA
As you can see, easy access savings accounts that can't be managed in-branch fare a little better, perhaps because they're cheaper to run. Even then, interest rates still fall as low as 0% (thanks, First Direct). You'd do just as well keeping your money under your mattress.
Current accounts are still better
Remember that if you have a small or medium-sized pot, you’ll likely be better off putting your money in a high-interest current account.
Nationwide's FlexDirect Account gives you 5% on your balance for the first 12 months. The TSB Classic Plus Account also offers an impressive 5% interest - and it's not just a teaser rate.
Lloyds offers 4% on balances between £4,000 and £5,000 on it's Club Lloyds Account but if you've got a pot between £3,000 and £20,000, stick it in the Santander 123 Current Account. It gives you 3% interest on your balance.
For the best home for you money take a look at: Where to earn most interest on your cash, which compares peer-to-peer lending, current accounts that pay interest and more traditional savings accounts like ISAs and fixed rate bonds.
Compare more current accounts with loveMONEY
What will encourage us to switch?
The FCA also had a go at persuading savers to switch accounts by sending them digital reminders of the low savings rates they were getting.
It trialled a switching box and a switching return form too. The switching box would give customers information on the benefits of shopping around and switching while the switching form provides a tear-off form and a pre-paid envelope which allows savers to change accounts more easily.
Digital reminders by SMS text and email were positive, proving that they’re just as effective as reminder letters.
The switching box and the switching return form had some positives, but they only really encouraged switching within the same bank and didn’t push savers to move to better accounts from other providers.
These actions won’t be rolled out just yet; the FCA is looking at other options to help savers switch.
Not keen on a current account? Read these:
Why the Lifetime ISA isn't as good as you might think
Brexit: another HUGE blow for savers
Where to earn most interest on your cash
Fed up with miserly Cash ISA rates? Read our simple guide to Stocks and Shares ISAs
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