The savings deal that pays 0% and NINE others that offer next to nothing… and where savers can turn for a better rate
- Old easy-access deal from FirstSave, provided by FBN Bank UK, now pays 0%
- CitiBank’s Flexible Saver pays 0.01%, as do Danske Bank’s SaverPlus accounts
- Savers with £10,000 could be missing out on as much as £133 a year
Banks are allowing loyal savers’ money to languish in old accounts that pay next to nothing. One firm is now even paying customers in its easy access account ZERO per cent interest.
Last week, as part of our Stop Short-Changing Savers campaign, we told how savers were being deprived of £1billion in interest this year because banks have stopped playing fair.
Today, we reveal the ten lowest-paying accounts where savers’ nest eggs are being left to waste away.
Over time firms chip away at rates, which means savers who fail to switch deals regularly almost always end up on a worse deal
The worst-offending savings account, an old easy-access deal from FirstSave, provided by FBN Bank UK, now pays 0 per cent.
This is despite a statement on the firm’s website which reads: ‘We don’t believe in offering a high interest rate, then reducing it as soon as you’ve agreed to invest with us.
‘With a FirstSave Easy Access Account, you’ll get a consistently favourable rate of return, with easy access to your money whenever you need it.’
Meanwhile, CitiBank’s old issues of its Flexible Saver account pay a pittance at 0.01 per cent, as do old accounts with Danske Bank’s SaverPlus.
The most paltry rates are typically paid on old accounts now closed to new customers.
Over time firms chip away at the rate, which means savers who fail to switch deals regularly almost always end up on a worse deal.
The same banks and building societies then relaunch their accounts with better rates for new customers.
Today, the best-known banks now all offer a range of rates within their own accounts that vary by as much as 1.33 per cent.
Our sums show savers with £10,000 could be missing out on as much as £133 a year because their money is not held in their bank’s most generous account.
Banks have continued to keep their savings rates stubbornly low despite an increase in the Bank of England’s base rate last year to 0.75 per cent.
£100,000 earned just £91 interest
Anger: David Smith has been looking after his 88-year-old sister’s finances since February
David Smith’s 88-year-old sister had her savings locked in accounts paying as little as 0.09 per cent interest.
The retired income tax inspector had more than £40,000 spread across six Nationwide savings accounts, Isas and bonds.
But four out of six accounts were paid just 0.1 per cent interest — and an instant saver which had £3,355 in it paid out £3.35 over 12 months.
And a Lloyds savings account that contained £106,060 earned just £91.58 in interest one year.
David, left, a retired university lab officer, has had power of attorney for his sister since February.Her health problems meant she could not manage her finances.
David, 71, says: ‘Two Nationwide accounts paid just 0.5 per cent and the other four paid 0.1 per cent. Those four accounts paid less than £8.’
His sister had also deposited £102,107 into a Lloyds savings account after selling her home in 2014 — and the following year she was rewarded with £628.97 in interest (0.6 per cent). In 2018 just £91.68 was paid in interest (just 0.09 per cent).
David, who lives with his wife Lynn in Stockport, says: ‘I felt so angry when I found out what had happened.
It just shows loyalty counts for nothing and that these banks are taking advantage of vulnerable people like my sister.’
She recently moved into a nursing home and her care costs £4,000 a month.
Nationwide said: ‘We are unable to transfer members’ savings from one account to another without their consent as it may not be suitable for them.’
Lloyds Bank said: ‘Customers are made aware of what happens when their rate comes to an end, up-front and through a reminder, and it’s now easier than ever to switch to a better rate.’
Money Mail is now calling for banks to be forced to pay a basic savings rate to protect loyal savers.
We also want to see an end to the loyal penalty that allows banks to give their best rates to new customers, the introduction of a no-hassle switching service and a stop to misleading marketing tricks that sell savers short term deals that are no good in the long run.
The FCA is looking at the savings market as part of a wider investigation into how loyal customers lose out.
It says savers could gain around £300 million a year from the introduction of a basic savings rate.
The watchdog’s research found that long-standing easy-access account holders tend to receive interest rates 0.82 per cent lower than new customers.
Despite this, just 9 per cent of savers had switched accounts in three years.
Where are the best rates?
This is Money’s independent savings tables are updated daily and list the top rates for savers, whether they are looking for easy access or a fixed rate deal.
You can check the savings best rates here and the top easy access deals are listed below.
James Daley, founder of Fairer Finance, says: ‘Although we’re in a low interest rate environment, there is no excuse for banks cutting rates for loyal customers all the way back to zero or 0.01 per cent.
‘Customers understand that headline rates tend to fall after the offer period comes to an end but it is a step too far to stop paying interest at all and shows contempt for loyal customers.
‘The right thing for these banks to do now would be to close these accounts down and move customers into an ordinary instant-access account paying a reasonable rate.’
Citizens Advice has estimated that savers are missing out on £48 each on average for failing to shop around for a better deal.
Chief executive Gillian Guy says: ‘Other markets, such as energy and mobile, have shown action can be taken to tackle this systematic scam. It’s time loyal savers get better protections, too.’
Rachel Springall, finance expert at data firm Moneyfacts, says: ‘In an ideal world it would be great to see an automatic switching process for savers sitting on a poor rate to move to something better with that provider, or indeed for savings providers to reward existing savers with a better rate for their loyalty.’
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS