Half of savers now choose digital banks over high street giants as rate rises push them to unfamiliar names
- 34% of savers have opened an account with a new provider in the past two years
- Of these, 55% have exchanged the big banks for digital banks
- Better interest rates were the main reason for switching to a digital bank
Savers are now more likely to open an account with an online-only bank than with a high street name, according to exclusive data for This is Money shows.
In the past two years, 34 percent of British people have opened a savings account with a new bank or savings provider.
And half of savers who moved their savings in the same time frame ditched traditional household names for digital banks.
Jumping ship: savers have massively exchanged large banks for digital banks for better rates
The big box stores have been accused of ripping off savers by offering stingy rates, while many still offer easy-to-access accounts paying as little as 1.75 percent.
Most savers who moved to a new bank did so because of the higher interest rates.
More than half of savers say that their previous bank did not pass on higher interest despite the increases in the base interest rate, according to the survey among 2,000 people by SmartSave.
Anna Bowes, co-founder of Savings Champion website, says: ‘It’s great to see savers shaking off the inertia that plagues many – the big banks depend on their customers to remain loyal, but reward this with low interest rates on their savings.
“One of the best ways for these low-paying providers to pay more interest is for their customers to vote with their feet and move elsewhere to earn the highest interest rates they deserve.”
The average easily accessible account pays a rate of 3.2 percent, according to rate controller Moneyfacts.
The highest rate for an easy access account is 5.3 per cent, offered by small building society Chorley, although this only allows penalty-free entry once.
Coventry Building Society offers 5.2 per cent, with access granted three times a year without penalty, and Ulster Bank – part of NatWest – offers the same rate, but only on balances over £5,000.
The best interest rate paid for one year is from Union Bank of India, which pays 6.11 percent interest.
The average rate for these types of accounts is 5.38 percent, with most major banks nowhere near matching this level.
Andy Mielczarek, founder of SmartSave says: ‘As many major banks fail to pass on better rates to their customers despite base rate increases – and rightly come under fire for these shortcomings – it is no surprise that savers are looking further afield. then the shopping streets.’