Lloyds, Halifax and HSBC hike savings rates

Banking giants, Lloyds and HSBC have announced rate hikes on a number of savings deals on the same day their bosses were attacked again over their treatment of depositors.

Lloyds and Halifax (part of Lloyds Banking Group) have announced that they are raising interest rates on their fixed-income bonds and Isa products by 0.5 percentage point.

Both banks also announced increases to a number of variable rates, including easy access accounts.

Meanwhile, HSBC is also implementing rate changes for its fixed-rate depositors and Isa accounts, with increases of up to 0.65 percentage points.

Coincidentally, bosses of these banks were also summoned today by the Financial Conduct Authority to answer regulator questions about their low interest rates on savings accounts, driving up interest rates on mortgages and whether they treat customers fairly.

Despite a new era of higher interest rates, with the Bank of England’s base rate rising from 0.1% to 5% in 18 months, some of the bigger banks continue to offer savings accounts paying 1% or more. fewer.

At the end of this month, the FCA will introduce the consumer duty, a requirement for companies to always act in good faith and provide a fair price to their customers.

Earlier this week, the Treasury Committee wrote a letter to the four major banks and to the FCA about easily accessible savings rates.

The regulator was asked by a Treasury Committee what enforcement measures can be taken if companies fail to comply with consumer obligations.

The MPs also asked how the FCA will assess whether banks are making sufficient efforts to encourage savers to switch to higher rates.

Harriett Baldwin MP, and chairman of the Treasury Committee, said: ‘As a committee we’ve been questioning the big banks all year about their poor savings rates, and it’s clear that savers have been getting a rough deal for too long.

While it is welcome to hear the banks recognize that further action is needed, it is time to see an acceleration.

“We will follow developments closely and will be extra alert to apparent foot-dragging movements.”

Are these rate hikes enough?

The bosses of HSBC and Lloyds Banking Group (which includes Halifax) may be hoping that today’s changes can be a useful distraction.

Savers are likely to see their money’s worth with both Halifax’s and Lloyds Bank’s fixed income cash Isas – both of which will soon be at the top of the list.

Lloyds’ one-year fixed-rate cash Isa pays 5.45 percent, while two-year cash Isa pays 5.5 percent starting July 14.

Halifax’s pays slightly less — 5.3 percent for the one-year cash Isa and 5.35 percent for the two-year cash Isa, also starting July 14.

Currently, the best one-year and two-year fixed rate Isa deals are offered by Coventry Building Society, paying 5.3 per cent and 5.4 per cent respectively.

The average one-year Isa pays 4.49 percent, according to Moneyfacts, which both comfortably beat Lloyds and Halifax.

As for the flat rate taxable accounts, neither Lloyds nor Halifax look that appealing as they offer the exact same rates as their fixed cash Isa deals.

The best one-year fixed rate taxable deal pays 6.01 percent and the best two-year fix pays 5.95 percent.

– View the best deals with a fixed rate here.

Halifax also increases rates on its Isa Reward Bonus Saver and Reward Bous Saver by 0.8 percentage points, from 3.4 percent to 4.2 percent. This is available to anyone with a Halifax Reward checking account.

Club Lloyds customers see the rate on the Club Lloyds Advanatage Saver and Advantage Isa increase by 0.8 percentage point, from 3.2 percent to 4 percent.

Although some rates now look competitive. The changes Lloyds and Halifax have made to some of their floating rate deals could be viewed as insufficient by both savers and regulators.

As of July 20, standard easy access deals from Loyds and Halifax will rise just 0.2 percentage points.

Halifax’s Everday Saver and Isa Saver customers will soon receive 1.15 per cent on credits up to £10,000 and 1.25 per cent up to £50,000.

Those who have parked their money in Lloyds Babk’s Easy Saver or Cash Isa Saver will see the rate rise from 0.9 per cent to 1.1 per cent on balances up to £30,000.

To put that in perspective, the average easy access rate across the market is 2.49 percent, while the best easy access deals pay 4.35 percent.

What about HSBC?

HSBC’s rate changes are effective from tomorrow. The 0.65 percentage point increase on its fixed rate accounts will increase the one-year agreement to 5.05 percent and the two-year agreement to 5.1 percent.

While these are slightly above the average market rate – 4.8 percent according to Moneyfacts – they lag well behind the best buy deals.

HSBC also added 0.2 percentage points to its Premier Loyalty Isa, which pays 3.2 percent starting tomorrow, as well as its Advance Loyalty Isa to 2.7 percent.

These are essentially Easy Access Isa’s, both of which fall way short of the best Easy Access Isa deals on the market that pay over 4 percent.

One notable area that HSBC is improving where depositors can see good value for money is the popular 4 percent Online Bonus Saver.

The balance to which the 4 per cent rate is applied expands from £10,000 to £50,000 and potentially adds £680 in annual interest to account holders who max it out. Anything over £50,000 earns 2.3 per cent.

The extension of the 4 per cent rate means that someone who has £50,000 in this account could earn £2,000 in interest over 12 months – if the rate remains the same.

A disadvantage is that the 4 percent rate only applies to the month in which no money is withdrawn.

During a month in which a withdrawal is made or the account is closed, savers earn only 1.75 percent.