Should you ditch your bank savings and find a better deal?

Major banks are “cashing on savers’ fear of faff,” with many preferring to stay loyal to their bank account and failing to shop around, a study finds.

According to Hargreaves Lansdown, half of Britons keep their savings with the same bank where they have their checking account.

Despite savings rates having hit their highest level in a decade and the best fixed-rate deal now paying 5 percent, some savers seem to prefer convenience over returns — despite much higher rates now being offered compared to previous years.

>> View the best buy savings rates in our independent best buy tables.

As a result, many savers continue to leave their money in large, low-interest banks and savings accounts.

In the survey, 2,000 Britons were asked if they were looking for a competitive savings account.

Nearly half said no and that they just go to their usual bank and a third of Brits say they use comparison sites to choose their savings account.

The survey found that the most important thing for people when choosing a home for their savings account is that it is easy to access their money and easy to open.

Only a fifth of people said rates were the top priority when looking for a savings account.

Sarah Coles of Hargreaves Lansdown said: ‘High street banks are cashing in on our fear of faff.

‘Half of us save at the same bank where we have our checking account, and almost half don’t look anywhere else.

“It’s not out of a great attachment to the bank in question, or the need to save in a branch: we just can’t be bothered with the hassle that we suspect is involved.”

The location of a savings provider or the ability to visit a branch was also a common priority for savers, according to the survey.

Coles adds: ‘There are cases where this is essential, especially if you are saving with a local construction company with exceptional savings rates for local residents.

“In most cases, the deals available online mean it’s at least worth trying a smaller and newer bank with a more competitive offering.”

Why should savers look around?

The danger that Britons keep their savings with the bank where they have a checking account is that they miss out on better interest rates at a time when more and more people are coming under financial pressure.

There is a staggering £267 billion stashed in current accounts earning no interest at all.

Another £461 billion is dwindling in easily accessible deals that pay less than 0.5 percent, an analysis by Paragon Bank reveals.

It remains clear that many of the major banks currently have no inclination to fight for savings or play fair on rates.

Barclays, for example, pays just 0.15 percent on its daily saver. Someone who has £20,000 in the Barclays Everyday Saver account will only earn £30 in interest after a year.

Meanwhile, Lloyds Bank, HSBC, NatWest and RBS pay just 0.4 percent on their easy-access deals. Halifax pays 0.45 percent.

These are far below the national averages, according to the latest data from Moneyfacts. The average low-threshold rate now pays 0.99%.

There are currently more than a dozen savings providers offering easily accessible deals that pay 2 percent or more. On £20,000, that’s £400 or more of interest after one year.

For those nervous about moving their money to a bank or mortgage broker they’ve never heard of, the good news is that some major providers have been raising rates lately.

While it’s true that easy-access best-buy rates are mostly made up of smaller challenger banks and mortgage lenders, a major bank, Santander, recently bucked the trend and launched an easily-accessible best-buy deal with a price tag. of 2.75 percent.

While it still offers a daily saver that pays a paltry 0.2 percent, eSaver Limited Edition from Santander is by far the best easily accessible deal on the market right now.

Another big name to create our independent best-buy tables is Nationwide. The three-year fix pays 4.75 percent – just 0.1 percentage point away from the current best buy.

While the priority for many savers is an account that is easy to open and access, many may underestimate how quick and easy it can be to open a savings account with a new provider.

For example, many of the major app-based challenger banks offer solid returns and easy-to-use platforms that can be managed via a smartphone.

Many of these challengers regularly appear on our independent best-buy tables.

Examples include Atom bank, Zopa bank and Tandem bank. This is Money has tested them all and found that sign up times don’t exceed ten minutes.

In any case, savers are given an account number and sort code and can then add or withdraw money from their personal bank as and when needed.

All three providers – like all savings providers that appear on our best-buy tables – come with FSCS protection.

This means that savers deposits with each provider are protected up to £85,000 per individual account, or £170,000 in the case of joint accounts.

Another option for savers is to get started with a savings platform.

Savings platforms allow customers to open multiple savings accounts with multiple providers, without having to go through a full application every time they open a new account through that platform.

It means they can open multiple savings accounts at many different banks from one online account whenever and wherever you want, without the usual form filling and administration.

Some savings platforms are free to use, including: Raisins UK*, Hargreaves Lansdown Active Savings,* Aviva Save and AJ Bell’s Money Savings Hub.

While they don’t cover the entire market and therefore may not offer the very best rates, the rates on all four platforms are extremely competitive.

Raisin UK, for example, currently offers an easily accessible deal that pays 1.95 percent, a 32-day notice period of 2.22%*, a six months fixed payment 3 percent*, a nine months fix pay 3.6 percenta one-year deal that pays 4.17 percent* and a two-year deal that pays 4.5 percent.*

Hargreaves Lansdown’s platform* hosts a six-month deal that pays 3.02 percent, a one-year deal that pays 4.05 percent, and a two-year deal that pays 4.6 percent.

Sometimes savings platforms offer promotional offers to those who are singing for the first time.

For example, those who sign up for the first time through one of the links above on Raisin’s platform and deposit £10,000 into the account will also receive a £30 welcome bonus.

Aviva Save is also offering the opportunity to get a £40 M&S, B&Q or Amazon gift card for the first 6,000 people who sign up for one of its fixed prices and deposit £10,000.

For those with large amounts of savings, the main benefit of using a savings platform is the management of the FSCS protection given to each individual banking license.

By distributing money but seeing it in one place, savers can maximize the protection it provides.

By giving savers access to more than one provider, savings platforms allow them to spread FSCS protection across their multiple holdings.

For example, if they were to save with six different banks all covered by the FSCS on the platform, they would be protected up to £85,000 in each account – notwithstanding any additional funds they might hold separately with the bank outside the platform.