New Which? research shows that the longer you have held your savings account the more likely you are to be earning a pitiful rate of interest. And the chances that are your bank doesn’t want you to know.
Loyalty pays, right? Wrong. At least not in the world of savings. We’ve found that spending more time with one savings account actually increases your chances of ending up on a pathetic rate of interest.
For example, almost nine in 10 savings accounts that were available six years ago are now paying just the base rate of 0.5% or less and two thirds are paying a shocking 0.1% or less.
Savings are going stale
And if you opened your account 10 years ago, you’ve even more chance of finding that your savings interest is barely worth your while.
Compare this with the 2.9% you could currently be getting from a Best Rate instant-access savings account. This would give you £112 more interest a year (after basic-rate tax) on a £5,000 balance than if you were earning 0.1%.
Despite this, our research shows that more than a third of savers still have money in a savings account they opened six years ago or more.
On average, UK savers with instant-access, notice and cash Isa accounts could be £322 a year better off if they switched to Best Rate versions of their accounts.
So why don’t we switch? Part of the reason is that banks and building societies often don’t provide us with the information we need to realise how poor the interest rate we’re getting is.
Do your homework
In our research, almost four in 10 savers said they won’t switch because they think all savings accounts are pretty much the same.
Savings providers often lure us in with attractive rates and then gradually reduce them to paltry levels. But many don’t print the interest rate you are currently getting on your statement. We are campaigning for banks and building societies to change this.
Don’t let your bank take you for a ride. Visit our unique Savings Booster tool to find out how much interest you are earning now and how much more you could be getting by switching to another account with your existing bank or elsewhere. Or watch as your savings stagnate.