18th July 2016
The FCA has published a second set of data showing the lowest interest rates offered by 32 providers of easy access cash savings accounts and easy access cash ISAs. The full list is published on this link – www.fca.org.uk/static/documents/sunlight-april-2016.pdf
The information published today is based on rates as at April 2016.
This is the FCA’s ‘sunlight remedy’ which aims to embarrass providers into offering better interest rates for closed account customers. The Post Office is paying absolutely nothing to both open and closed account holders (Lowest interest rate offered on easy access cash savings accounts that can be managed in branch at 1 April 2016 – source FCA). M&S bank pays 1.30% to open accounts and 0.05% to closed ones.
The FCA has examining how to give savers better information so they switch accounts more often. This includes easy-to-understand information to help consumers compare savings accounts, and reminders to tell them when interest rates are due to change. These will be introduced in December.
Interest on a typical 90 day deposit account has already fallen by 82% over the last 10 years and these could fall further with an expected interest rate cut from the Bank of England on August 4th.
Danny Cox, Chartered Financial Planner, Hargreaves Lansdown says: “Long standing customers in closed accounts are getting a raw deal with many providers taking advantage. Providers seem perfectly happy to let savings held in closed accounts wither on the vine and in some cases pay no interest at all. This shows the importance of shopping around and switching accounts to make the most of your money.
“Savers breathed a sigh of relief last week as the Bank of England held interest rates at 0.5%, however this may well prove to be a 3 week stay of execution. Savers continue to feel the pain of low returns on cash but can take action to make their savings work harder.”