More than £1 trillion in savings earning less than 2% - best accounts to switch to today
Savers are being urged to assess their returns, with an eyewatering £1.15 trillion earning less than 2%, while the Bank of England base rate is at 5.25%.
The funds are being held in savings and current accounts, with Bank of England data showing the average easy-access savings account offered 2.02% in December.
Fixed accounts gave on average 3.71%.
Martin Sokk, co-founder and chief executive of investment platform Lightyear, which analysed the data, said: “Banks aren’t passing on the central bank rate and instead are taking the profit for themselves."
NimbleFins updates its Best Savings Accounts guide each week with the highest interest rates for easy access, fixed rate, notice, regular and Sharia savings accounts.
The best easy-access savings account today is with Coventry Building Society, offering 5.15% - but this is still below the Bank of England base rate.
In signs the banks believe interest rates will soon fall, the best fixed rate account is with Allica offering 5.17%, but this is only for six months.
Next is Smart Save offering 5.16% for a year.
Erin Yurday, CEO and co-founder of NimbleFins, said: "This research is disappointing for savers and feeds into the narrative that banks aren't passing on the higher base rate to customers, despite raising mortgage rates.
"It's particularly frustrating when it comes to easy-access savings accounts which usually don't fix their rate so can easily react to the changing base rate.
"With inflation at 4% for December, savings earning less than 4% are actually losing value when accounts should be working hard for us. And that's before we take into consideration the amount of tax a saver may have to pay on interest.
"There are regular savers accounts offering above the Bank of England base rate as high as 8%, so it's worth shopping around and looking at our Best Savings Accounts guide for the latest rates."
The Financial Conduct Authority, which regulates banks, said: “We have been looking closely at the value firms provide to savers and we have seen some saving rates improve significantly. However, we expect to see continued improvement from some firms.
“We also continue to encourage customers — including those with money in current accounts — to shop around for the best deals.”
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