In-branch savings rates 'far lower than online accounts'
Those who use in-branch savings accounts are worse off than those who manage their money online, research finds.
People who bank in-branch only get a ninth of the interest paid on their savings compared to online customers, according to new research.
The Financial Conduct Authority (FCA) said access savings accounts that are handled in-branch now pay an average of 0.25% to new customers compared with 0.5% for those who use internet-only accounts.
In a bid to encourage people to shop around, the watchdog has named and shamed banks offering the worst rates or lower returns for branch-based accounts.
In some cases there are huge disparities between different types of accounts.
At the Post Office, branch-based accounts typically paid 0.1% compared with 0.9% for its online accounts.
Below are just a few examples. but you can read the entire list in the FCA's report.
Earn a top rate on your savings with a current account
|
|
Branch access average interest rate |
Online average interest rate |
|
West Bromwich Building Society |
0.20% |
0.90% |
|
Tesco Personal Finance |
0.60% |
1.01% |
|
Yorkshire Building Society |
0.25% |
0.50% |
|
Leeds Building Society |
0.50% |
0.75% |
|
Co-op |
0.25% |
0.40% |
|
Santander |
0.25% |
0.35% |
What is being done about it?
Banks say that it costs more to run a branch than it does to offer services online.
However, last week the FCA brought in new rules that force banks to be clearer about their interest rates in their promotions and when customers open new accounts.
On top of that, they’ll have to remind people about changes to interest rates when an introductory bonus ends.
Christopher Woolard, executive director of strategy and competition at the FCA, said:
“The new rules will help consumers get the facts they need to make an informed decision about what to do with their savings.
"One of our regulatory priorities is the treatment of long-standing customers and we want to see all customers benefit from competition and innovation in financial markets.”
Still befuddled as to where to stash your cash? Check out Where to get the most interest on your savings for some guidance.
Or you can compare current accounts, savings accounts and ISAs direcly with loveMONEY right now!
More news for your money:
Last chance for all-in-one 30-month 0% credit card
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