Savers looking for the best flexible, easy-access accounts should dodge deals from the ‘big five’ banks, data reveals.
All of Barclays, HSBC, NatWest and Santander ranked in the third quartile of providers’ rates of Moneyfacts’ Consumer Duty Audit Tool for Savings.
Indeed, the ‘big five’ banking providers pay just 1.64% gross on average for their flexible rates, while the market average sits at 3.08%.
However, the best rate Lloyds can offer is 1.30% gross on its Easy Saver was placed in the lowest quartile of the audit among rivals.
Of the big banks, HSBC and Santander led the way, with 1.98% and 1.70% rates on the Flexible Saver (Standard) and Easy Access Saver (formerly eSaver) accounts respectively.
In comparison in the easy access market, there is a 4.85% rate available with Raisin’s Limited Edition Easy Access account provided by GB Bank. This rate is also matched by Cahoot’s Simple Saver (Issue 4), which also only requires a deposit of £1 to open.
Since the Bank of England base rate was cut for the first time to 5% in four years, experts have urged savers to shop around while interest rates continue to head southwards.
However, in the fixed-term market, the bigger banks performed much better on Moneyfacts’ savings tool.
Again, HSBC leads the way among its high street rivals, with a 4.45% gross rate on its one-year bond, which ranks in the top quartile according to Moneyfacts’ standings.
Barclays has the next top rate for a one-year bond, with a 4.30% offer available to new and existing customers.
In the third spot for the same term was NatWest’s 4.27% rate, while the best two-year deal is from HSBC’s Fixed Rate Savings offer at 4.10%. The “paltry rates” offered by big banks have led to criticism from savings experts who doubt how much effect the Consumer Duty rules have had.
Those new regulations which aim to give customers fair value were introduced by the Financial Conduct Authority (FCA) in July 2023.
‘Avoid putting all your cash with one brand’
Rachel Springall, finance expert at Moneyfacts, said: “Traditionally easy access accounts would pay lower rates than fixed, but where the biggest banks’ fixed bonds are sitting towards the top end quartiles in the market, their easy access offers are towards the bottom.
“This shows why savers should avoid putting all their cash with one brand for convenience, as better rates could be available elsewhere which can depend on the type of accounts.”
Springall added: “The Consumer Duty rules from the FCA are designed to provide better value for consumers, and it will be up to providers to ensure they are offering their customers fair value.
“However, it will be down to savers to proactively keep on top of the rates and service they receive and be sure to complain if they are treated poorly. There are many more brands out there to choose from and so long as they are protected by the Financial Services Compensation Scheme (FSCS), there is little reason to disregard them”
