The Bank of England might have left its base rate unchanged at 4 pc at its meeting last month but savers are still suffering cuts.
That’s because they are still adjusting rates following the base rate cut from 4.25 pc at the start of August.
Often providers will cut rates to new savers quickly then turn their knives to older accounts spelling bad news for loyal savers.
Be warned – there are more than 1,325 easy-access accounts which are closed to new savers and a further 850 easy-access cash Isas.
Shockingly, there is a growing number paying 1 pc or even less. That’s a quarter of the 4 pc you can get elsewhere.
And these accounts are mainly run by big banks where savers have billions of pounds. Sticking with your current provider’s easy-access account is a huge mistake and you can have just as quick access to your money elsewhere – often in a matter of minutes, although with some providers you could have to wait a couple of hours.
While the inflation rate is stubbornly sticking at 3.8 pc, this minimal interest means your savings are losing 2.8 pc of their value each year. And it could get worse. Inflation is expected to hit the 4 pc mark soon.
Earning more than inflation is key to preserving your financial wellbeing. It can be a pain keeping on top of who pays what on which account, especially with those that try to hide what they are paying by launching new editions of the same account.
Sticking with your current provider’s easy-access account is a huge mistake and you can have just as quick access to your money elsewhere, writes Sylvia Morris
One solution is to go for an account which pays the same rate for all savers and has earned a reputation of paying a consistently good rate. In my book, these include Ford Money Flexible Saver and Flexible Isa – both down from 4.18 pc to 4.04 pc last week – Family Building Society Market Tracker at 4.14 pc and its Market Tracker Isa at 4.19 pc, RCI Bank Freedom Account at 4.05 pc or Investec Online Flexi Saver at 4 pc.
The app-based account from Spring (part of Paragon Bank) at 4.3 pc has recently joined my list.
That’s a whole lot better than the big banks.
Savers with Lloyds, Halifax, Santander and TSB have joined the 1 pc club and those with Barclays, NatWest, TSB and Nationwide are edging dangerously close. Even worse is Metro Bank which pays a piddling 0.9 pc on both its Instant Access Cash Isa and Instant Access account
Lloyds pays 1 pc on its Easy Access Saver and Cash Isa Saver if you have less than £25,000 in the account. Its Instant Cash Isa is also at 1 pc. The bank moves you here once you have been in its cash Isas for a year. Ditto Halifax Instant Isa Saver, where you end up if you have been in its Isa Saver Variable, Isa Reward Bonus Saver or Isa Bonus Saver for a year.
TSB eSavings and Easy Saver hand out just 1 pc to savers who have been in the accounts a year.
Santander might have grabbed headlines with its Edge Saver launched last week (6 pc rate on up to £4,000, including a bonus for the first year linked to its Edge current accounts) but it pays a lousy 1 pc on its Everyday Saver.
You are moved there once you have been in its Easy Access Saver or Limited Access Saver for 12 months.
Some big providers manage to stay just over 1 pc, but you should still switch to a better account. Barclays Everyday Saver pays 1.06 pc and HSBC Flexible Saver 1.15 pc, both from October 20. At NatWest your rate is 1.06 pc on up to £25,000.
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