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Some of the biggest high streets banks are offering less interest rates Banks demand more in return from their customers than so-called challenger banks, a new study shows.
comparison site finder A total of 85 easy accesses were analyzed savings accountsSpread across 33 different providers. The analysis included big-name high street banks including Bank of Scotland, Barclays, Halifax, HSBC, Lloyds Bank, Royal Bank of Scotland, Symantec, The Co-op Bank, TSB and Virgin. WealthPlus nationwide as a construction society.
While most of them (85 percent) had at least one requirement for customers to access it – such as opening a current account. savings Account – There was a clear trend towards higher demands from high street banks, with lower demands – and better rates – from challenger banks.
Most importantly for consumers, as inflation reached 4 per cent, the average interest rate available in high street banks was only 2.04 per cent.
Keeping cash means earning little or no interest People’s real spending power has been destroyed due to inflation higher level. Experts recommend a quick online search to find better interest rates from your current provider.
Finder’s analysis showed that challenger banks are offering better average interest rates of 3.54 per cent, but even better returns are possible, with many banks still offering more than 4 per cent.
It’s also worth noting that these are for easy access accounts; If you want to save regularly, many banks still offer regular savers at around 7 percent interest rates.
many strings are connected
Finder’s analysis revealed that keeping an additional account open was the most popular requirement for high street banks, with 54 per cent of them requiring customers to open at least one other account before they can access their savings account.
This dropped to 17 percent for challenger banks, which instead supported bonus periods (39 percent) or minimum balances (29 percent).
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Another condition providing differentiation between the big banks and challengers was tiered interest rates, which essentially give savers a different reward depending on the amount they deposit. More than a third (39 percent) of large banks did so, more than any challenger.
Kate Steer, Finder’s money expert, said: “The fact that 85 per cent of so-called easy access deals are restricted is absolutely ridiculous, when all savers want is a good return on a pot they can access when they need it. You can forgive market-leading deals for making customers jump through hoops to get the top rate, but even for low-interest accounts having strings attached is a very common occurrence. Is.
“This is particularly true for high street banks, where some customers may have trusted their money with them for decades, but which actually offer lower average rates and more confusing terms.”
new entrant in the market
On Tuesday, Zopa released a new market-beating rate for its savings account, offering a total of 4.75 percent including the increased rate.
In line with the above customer requirements, Zopa says that to get the increased rate you will need to hold a current account with them and deposit a minimum of £500 into that current account each month. Without this the rate is 3.25 percent.
The current account itself – called a biscuit account – is also unusual in that it offers 2 percent interest on that money, compared to most other accounts that do not pay interest.
There’s no need to leave a monthly £500 deposit in the Biscuit account – it can be spent, saved or withdrawn later.
Alistair Douglas, CEO of TotallyMoney, said: “The new Zopa Easy Access Savings Account comes with an inflation-beating rate, and unlike other so-called ‘easy access’ accounts, it comes with no withdrawal restrictions.
“If you’re sitting on savings and haven’t moved your money for a while, it’s more likely you won’t be on the best rate. And with inflation still high, your cash could effectively lose its value. Just remember loyalty doesn’t pay off, but being smart with your savings can pay off.”