How to get the best savings rate and not let banks rip you off

Is your bank cheating you?

Scratch that actually, the question should be, do you allow your bank to scam you?

We all know that banks and building societies like to pass on interest rate increases faster and more fully to borrowers than to savers.

But as interest rates have picked up off the ground and skyrocketed over the past year, Britain’s big banks have thoroughly surrendered.

Analysis by This is Money revealed the magnitude of this last week, when figures from the annual results of Britain’s Big Five banks showed they reaped an additional £7bn from growing net interest margins.

Net interest margin is an important metric in the banking industry and measures the gap between what borrowers are charged and depositors are paid.

The larger the number, the better the spread and the more profit for the bank.

Our numbers showed how Barclays, NatWest, Lloyds, HSBC and Santander made extra money by passing on more of the Bank of England rate hikes to borrowers than to savers.

In total, the banks raised a total of £39.9bn from the gap between savers and borrowers. This is how much each bank earned on net interest margins.

You would of course expect banks to make money from this. A banking sector with no or very low net interest margins is not going to be particularly stable – and we all have memories long enough to remember why we like banks and building societies to have a healthy degree of stability.

Nevertheless, the fact that the Big Five clocked in an extra £7 billion means they earned a whopping 21 per cent more on net interest margins than a year earlier.

And remember, our analysis only looked at the numbers from the big banks, the real cost to savers when you add in the rest of our banks and large and small mortgage banks will be much greater.

You’d think that after years of rock bottom rates — and a recent history of illustrious bills like the 0.1 or even 0.01 percent savings rate — banks would try to offer savers a better deal when base rates finally started climbing.

Instead, we saw the Mini-Budget Mortgage Panic – which pushed mortgage rates even higher than the base rate hikes – coupled with measures to swipe more of the spare change from unwary savers.

That’s even managed to get bank bosses before the Treasury Select Committee for a quirk about why customers seem to be getting a rough deal.

The culmination of this was the dubious claim that depositors don’t really want better rates on fancy, easy-to-access savings accounts, but instead more complicated regular depositors with all their inherent catches.

But should savers be inattentive here? I would say they shouldn’t.

We know that big banks have treated us with disdain by paying atrocious rates on old bills, we know that smaller challenger banks and building societies offer better rates, we know that loyalty doesn’t pay and that you should move your savings to the best deal.

To return to my earlier questions: are banks cheating us or do we allow banks to cheat us?

I would largely blame the banks, but I would say we also need to get the situation under control.

We should expect better, but a banking industry that we rescued not so long ago refuses to treat us fairly.

That means voting with our feet, staying on top of our savings, and moving our money to the best rates.

At This is Money, we’re here to help. Here are five things you need to do it.

> Best savings rates: our independent tables

> Five of the Best Money Isas: Our pick of the best deals

> Savings alerts: receive an email when a good new deal comes in

> Savings & banking: Our section with the latest news and tips

> Best Bank Accounts: Find one that’s right for you