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Rhiannon Philps

Content Writer
Published: 27/01/2025
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Flexible easy access savings accounts from the major banks continue to dwindle at the bottom of the market.

 

Four of the five major banking brands sit in the bottom quartile of the easy access savings market, according to recent analysis from the Moneyfacts Consumer Duty Audit Tool for Savings.

Only the Flexible Saver from HSBC sits in the third quartile of the market, paying 1.74% gross (as of 20 January 2025).

In September 2024, flexible savings accounts from Barclays Bank, NatWest and Santander were also in the third quartile of the market, but these brands have now joined Lloyds Bank in the bottom quartile after cutting rates over the past few months.

The most flexible accounts from the big banks now pay an average of 1.42% gross on a £10,000 minimum deposit, compared to the market average of 2.90% gross.

“It will be disheartening news for savers to find the biggest banks have cut rates on their most flexible savings accounts, resulting in a further drop in their market positions,” commented Rachel Springall, Finance Expert at Moneyfacts.

“Savers who prefer to have their cash at hand will unsurprisingly feel disgruntled that the situation has only worsened; as the Bank of England made base rate cuts, the big banks were soon to follow,” she continued.

More competitive fixed bonds

In contrast to their flexible easy access accounts, all of the five major banks offer fixed bonds that sit in the top quartile of the market.

Performing best of these big banks is Santander, which offers 4.10% AER on its one-year bond and 3.90% AER on its two-year bond.

But, while this is encouraging for savers who want to keep their money with a familiar name, it’s still possible to find higher rates by considering other brands.

For example, Vida Savings tops our one-year fixed bond chart at 4.77% AER, closely followed by SmartSave at 4.76% AER, while Atom Bank and Close Brothers Savings pay the market-leading rate on two-year bonds at 4.70% AER.

Springall points out that challenger banks often pay higher rates as they “work hard to improve their market positions and gain trust”, in contrast to big banks that “don’t need to make too much effort to pull in investors due to their legacy”.

"Loyalty does not pay which is why savers need to look beyond the biggest brands when comparing savings rates," she noted.

Compare fixed rate bonds

Visit our charts for the most up-to-date list of the top fixed rate bonds.

Finding better value

With such a disparity between the top savings rates and those offered by the major high street banks, it’s important for savers to review their savings and switch if they’re not getting a good return on their money.

Under the Consumer Duty rules, which the Financial Conduct Authority (FCA) introduced in 2023, firms need to offer products that provide fair value for consumers. This could include setting interest rates at a level that reflects the base rate and overall market, for example.

However, savers shouldn’t assume that these rules mean the big banks (and any other provider) will automatically offer competitive rates. By keeping your savings in the same account without checking the rate, you risk missing out on a significant amount of interest.

Instead, you should be proactive and compare savings rates regularly to ensure you’re maximising the interest you could earn on your money.

Compare savings rates

Our charts are updated throughout the day to allow you to see and compare the latest savings rates.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.