Consumers still failing to get best rates on their savings
August 28, 2007 by admin
Filed under News, News-Banking
According to a recent study many consumers in the UK are still failing to make the most of their savings by finding an account that pays a competitive interest rate.
The news comes despite the five interest rate rises that have been applied to the base rate by the Bank of England over the past year, taking the base rate from 4.5% to 5.75%. Experts state that consumer apathy is resulting in many savers losing out on significant amounts of interest each year.
Many banks have come under fire over the past year for failing to apply interest rate rises in full, or at all in some cases, to their savings accounts. Even those that do pass the rate rises on have been under fire for taking their time to do this, whilst moving much more quickly when it comes to applying the rate rise to borrowing.
Although many savings accounts have let their interest rates stagnate, and some pay very low rates of interest, there are also some account that have passed on all interest rate rises in full, and are now paying above and beyond the base rate.
Amongst the savings account that are now paying well over 6% in interest to savers are ICICI, Sainsbury’s online savings account, and IceSave. However, despite the availability of higher rate savings account research shows that many consumers are allowing their savings to snooze in low rate account where they are earning very little in interest.
Many consumers don’t bother to research higher interest rate alternatives, and some simply feel that they don’t have the time to switch. However, for many – particularly those with substantial savings – switching to a higher rate account could mean a significant difference in the amount of interest earned.
One industry professional stated: “I guess it’s just clients are looking for reliability and consistency; they don’t always want to be chopping and changing their bank accounts. So I think people are aware of it, it’s just a matter of priority. You don’t want to be changing your bank account every couple of months.”
Tom Smith
28th August 2007
