Skip to main content Accessibility Statement
ten pound notes

Does your savings account pay any interest?

In a move designed to put the big banks under the spotlight, the City watchdog has published a report highlighting low savings rates offered by several providers. But where does that leave savers?

The Financial Conduct Authority (FCA) has revealed the banks that give their customers next to nothing in interest payments. Among them are are Barclays, Lloyds Bank, Santander and TSB, all of which have a savings account that pays 0.1% or less in interest. Building societies such as Progressive and Skipton also have 0.1% savings accounts.

 

Who is paying interest?

So, where can you go to deposit your princely sums? There are banks that offer at least 0.5% interest to their customers. These include Metro Bank, Tesco Bank, NatWest and RBS. You might also find your existing bank has a different account with a better rate.

There are also some very competitive rates available for smaller balances in many current accounts, though watch out for requirements such as a minimum monthly pay in or an monthly fee.

What to do if you’re earning almost no interest

If you take the time to look at what interest you’re earning on cash held in a savings account and find it really is piffling, now may be the time to take action by switching to a new bank or building society.

It takes minutes to search on comparison sites for the best payers and not much longer to put in an application. You may not earn a fortune by switching, but something is better than nothing – and why should you reward a bank that pays close to 0% with your custom, after all they are using your cash to make money for themselves?

What to watch out for if you’re a big saver

Whilst most of us tend to have savings that can be measured in three or four digits, some will have much more in ISAs or standard accounts.

For those who have saved around £75,000 it’s worth noting that this will be the new Financial Services Compensation Scheme limit from 1 January 2016. Until then it is £85,000 per person, per firm. The FSCS covers savings that are at risk of loss in the event that account providers, typically banks and building societies, go bust or is otherwise unable to pay.

If this happens personal savings of up to £75,000 in most cases will be protected and paid out to the account holder from a central, ring-fenced fund. If you have savings that are close to this limit or exceed them, you should spread them between different account providers to ensure all your money is protected.

 

What do you think?

We really want you to share your views, but please remember to be nice ☺
All fields are required. Check out our full commenting guidelines

By clicking on 'Post Comment', you're agreeing to our Commenting Policy

  • C.N.B / 11 December 2015

    This article is not properly researched: it cites proximate causes for the massive savings rip-off which is going on not only in UK but most developed countries in the world. Do not blame the high-street banks, go straight to the Bank of England, which - with its QE and near-zero interest rate policy - is systematically ripping off all savers for the benefit of the over-indebted Government. UK Government can borrow at rates of sub-2% for ultra-long maturities, in effect debt interest forgiveness. The macro-argument is that cheap money is stimulating the economy: it isn't, it is productivity-sapping and just keeps zombie companies, which should have failed long ago, hanging on in quiet desperation. QE should be discontinued now in fairness to savers and to stop subsidised funding to non-productive borrowers.