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Ella Mower

Senior Content Writer
Published: 11/05/2023
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Four more well-known banks scrutinised by Parliament for not rewarding loyal customers.

Nationwide, Santander, TSB and Virgin Money are the latest banks and building societies to come under fire from the Treasury Committee for offering savings rates significantly below the current interest rate. This widens the Committee’s campaign for banks to increase the savings rates offered to loyal customers, which in March saw Barclays UK, HSBC UK, Lloyds Banking Group and NatWest Group called into question.

In letters sent yesterday, the Treasury Committee asked the banks to explain how increases to the base rate are passed on to savers, why rates on their easy access accounts are so much lower than the base rate, and whether they make loyal customers aware of higher rate savings options available to them.

How do their easy access rates compare?

Provider

Account

Rate (AER)

Nationwide

Instant Access Saver

1.25% AER

Santander

Everyday Saver

0.70% AER

TSB

Easy Saver

0.90% AER  (Includes a bonus)

Virgin Money

Everyday Saver

0.25% AER

 

The banks and building societies being scrutinised currently offer interest rates of between 0.25% AER and 1.25% AER on their respective easy access savings accounts. This is despite the Bank of England making 12 consecutive rises to the base rate, increasing from 0.25% in January 2022 to 4.50% today.

The Financial Conduct Authority (FCA) defines these banks as ‘scale challengers’ and reports that they account for a quarter of all personal current accounts. In comparison, some of the best easy access savings accounts can be found from smaller challenger banks and offer in excess of 3.50% AER.

 

Provider

Account

Rate (AER)

Chip

Instant Access powered by ClearBank

3.71% AER

Shawbrook Bank

Easy Access Issue 35

3.65% AER

Al Rayan Bank

Everyday Saver (Issue 3)

3.56% AER (Expected profit rate)

Aldermore

Double Access Account Issue 1

3.55% AER

Cynergy Bank

Online Easy Access Account (Issue 60)

3.55% AER (Includes bonus)

Investec Bank plc

Online Flexi Saver

3.51% AER

 

What does this mean for consumers?

Despite the recent criticism from the Treasury Committee, Barclays UK, HSBC UK, Lloyds Banking Group and NatWest currently offer rates between 0.70% AER and 1.30% AER on their easy access savings accounts - still well below the base rate. Financial results from the ‘big four’, however, detail strong growth in net profits.

According to Harriett Baldwin MP, Chair of the Treasury Committee, this shows how “the UK’s biggest banks are continuing to squeeze record profits from their loyal savers”. 

Baldwin also encouraged consumers to shop around for the best savings deals.

“This, more than anything, will drive the banks to increase their currently measly rates,” she said.

The same sentiment is echoed by Rachel Springall, Finance Expert at Moneyfactscompare, who said some savers may not be seeing much benefit from the recent rises to interest rates. 

“It will be down to savers to compare their accounts regularly and move elsewhere if they are getting a poor return on their hard-earned cash. Challenger banks and building societies are currently paying some of the best returns, so it is always worth considering the more unfamiliar brands that have the same deposit protections in place as a big high street bank,” she said. 

Where can I find the best savings rates?

Use the Moneyfactscompare.co.uk savings charts to find the best deals on the market. From easy access accounts to fixed rate bonds, these tables are updated daily to keep you informed of the latest market trends.

When will there be a response?

In the letters sent to Nationwide, Santander, TSB and Virgin Money yesterday, the Treasury Committee established 24 May 2023 as a deadline for responding to their questions. Any responses are expected to be made public on the Committee’s website.

Previously, Barclays UK, HSBC UK, Lloyds Banking Group and NatWest Group defended their savings rates, with three out of four refusing to disclose revenue generated through savings accounts.

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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