Now the easy access rates will be 3.75%: here you will find the best deals
- Banks under pressure to raise rates after last week’s base rate hike
- Coventry BS will raise the rate on its best online easy access account to 3.6%
- Major banks are still dragging their heels as they keep record profits to themselves
Savers are lining up for big increases in interest rates on easily accessible accounts, experts say.
These deals are being tipped as the main battleground as banks fight for savings customers.
Building funds and smaller banks have already announced a new round of interest rate hikes in the coming weeks and easy-access rates are expected to rise by as much as 3.75 percent.
Pressure on banks to raise rates has increased after the Bank of England raised its key interest rate from 4.25% to 4.5% last week.
This was the 12th key rate hike in 18 months – the strongest increase since 1989.
Easy access: Mortgage banks and smaller banks have announced another round of rate hikes in the coming weeks and rates are expected to rise to 3.75%
Kevin Mountford, of savings platform Raisin, says: “Savers want to keep their money close at hand and you can expect interest rates to rise above 3.5 percent and even 3.75 percent.”
Savers are less likely to see large increases in fixed-rate bills. This is because savings providers believe last week’s base rate hike could be one of the last, and interest rates could actually fall in the coming months.
Chip, the app-based savings account, raised its rate to a top 3.71 percent earlier this month ahead of the Bank of England’s move.
Yesterday, GB Bank raised interest on its Easy Saver to 3.7 percent, while Ford Money’s interest rate rose from 3.45 percent to 3.6 percent. Cambridge BS today increases the rate on its Your Saver easy-access account to 3.5 percent.
Yorkshire BS rates will increase by 0.25 percentage points from today in line with the base rate. The industry-based Access Saver Plus Issue 7 pays 3.05 percent and its Internet Saver account between 3.25 percent and 3.5 percent, depending on how much is in your account.
In Coventry, rates will increase by a maximum of 0.25 points on 1 June. The top convenience access rate on the Limited Access Saver (Online) account is 3.6 percent.
Rates at Skipton also rise this month with Branch Tracker Issue 4 from 3.15 percent to 3.4 percent. The other variable savings interest rates will increase by 0.25 points from Monday.
But Britain’s biggest banks are still dragging their heels.
Interest rates are unlikely to match an increase in key interest rates at the big banks, the Treasury Committee, a group of influential MPs, warned.
This is because major banks keep record profits for themselves by raising rates on mortgages and loans, but not on savings accounts.
Earlier this year, the big four – Barclays, Natwest, HSBC and Lloyds Banking Group – were scolded by the Treasury Committee for failing to pass on base rate hikes to their savers.
They pay between 0.7 and 1.3 percent on easy-to-access accounts — less than half the rate of smaller competitors.
That despite the fact that the base rate has increased by 4.4 percentage points compared to 0.1 percent in December 2021. During that time, the High Street banks have passed on only 0.69 points.
Savers with £10,000 in one of these will earn £70 a year in interest, compared to £371 with Chip, £370 with GB Bank or £365 with Shawbrook Bank.
Harriett Baldwin MP, chairman of the Treasury Committee, is urging savers to find better deals by switching accounts. She says, “This will push the banks to raise their current paltry rates.”
The big banks pay well on some accounts, but they usually have terms and conditions that you must adhere to in order to earn the nominal rate.
For example, Barclays pays 5.12 per cent into its Rainy Day Saver account, but only on the first £5,000 saved into the account.
NatWest pays 6.17 per cent to current account customers who open their Digital Regular Saver for savings between £1 and £150 per month, but again only for balances up to £5,000.
Any savings over £5,000 will earn you 1 per cent at NatWest and just 0.7 per cent at Barclays.
Others show higher rates, but they usually only last for a year.
Your money is then automatically transferred to another account where the rate can be as low as 0.7 percent.
For example, the Halifax Reward Bonus currently pays 3 percent. But once you’re in the account for 12 months, you’re transferred to Instant Saver, which pays just 0.9 percent.
Sy.morris@dailymail.co.uk