RACHEL RICKARD STRAUS: Old banks ripping us off but we won’t switch

Rationally I know that my money is safe with a bank. It’s been over 15 years since it last looked like a couch was going to the wall.

Concerned Northern Rock savers queued for hours outside the branches to withdraw their money.

The government was determined that a run on a bank would never happen again. And since then, protection for savers has improved significantly.

They have the guarantee that they will get their money back if their bank goes bankrupt. All they have to do is choose a bank with FSCS protection and deposit no more than £85,000 in any one bank.

I know all this. Money in a bank is safe.

But while I’m ashamed to admit it, there’s still a part of me that’s unreasonably wary of newer sofas without a long track record.

Take last month when I was shopping for a new easily accessible savings account.

The rational would have been to choose the bank with FSCS protection that offers the highest interest rate.

After all, banks with this protection are all equally safe from deposits, whether they have been around for a week or a century, have 1,000 customers or ten million.

But I didn’t. I scrolled past the top two or three choices because I had only vaguely heard of them. Instead, I picked one that had a lower interest rate but was much more well known.

My caution didn’t stop there.

I chose a digital bank that only works via an app. The process couldn’t have been easier or more convenient. I downloaded the app on my smartphone, typed in my details and within minutes my account was active.

I’m really happy with how the app works and with its impressive set of security features, but for some reason I’m still concerned.

I don’t have a single piece of paper – or even an email – from that bank because everything goes through the app. I know nothing will go wrong, but I’m still thinking, If the bank’s app suddenly disappeared or crashed, what record would there be of it having my hard-earned savings?

Illogical as it may be, there’s something reassuring about receiving paper bank statements, knowing where you’d line up if you ever wanted to reclaim your savings, and banks that have been tried and tested for decades.

I’m sure over time I’ll get more comfortable with the idea of ​​new digital-only banks. Several are even at the forefront of the latest anti-fraud technology.

But what frustrates me is that the old, traditional banks are now making serious money off the prudence of people like me.

The Bank of England is likely to raise rates again next week – by a quarter of a percentage point or even double.

Soon after, many new challenger banks will pass on the interest rate increase to savers. The interest they pay is already generous: some offer rates of up to 4.5 percent. They will probably raise the rates further.

But we won’t hear a peep from most of the traditional, high street banks. They have not passed on past rate hikes to savers in recent months, so there is no reason to believe they will start now.

The basic rate is already 3.5 percent, but Lloyds, NatWest and Barclays still pay only 0.5 percent on their easily accessible accounts, Santander 0.55 percent and HSBC 0.65 percent.

The banks know they still have the trust of millions of their customers and are ready to take full advantage of it. They take advantage of the fact that many of us are too hesitant to leave the bank we’ve worked with for years – often since childhood.

Depositors are now missing out on billions of pounds in interest by sticking with the incumbents rather than trusting a challenger bank.

I know that switching can feel like a leap of faith.

But we just can’t let the old banks get away with this any longer.