Savers ‘missing out’ by not checking interest rates. Should you make the switch?

17% of adults admit they don’t check the rate of interest on their savings, which could mean losing out on bonus cash.

Millions of savers could be losing out on over £1,000 a year by continuing to store funds in low-interest accounts, according to analysis conducted by Yorkshire Building Society (YBS) and CACI earlier this month.

This includes over a third of people who stated that they keep their savings in current accounts.

As a result, approximately £366 billion is currently sitting across UK savings and current accounts that earn under 1%. This comes as average savings rates observed month-on-month increases from May, with a typical easy access savings account offering returns over 3.00%.

While the amount held in low-interest accounts has fallen from £380 billion at the start of this year, many savers are still missing out.

“It’s surprising that there continues to be such large pockets of people who are significantly missing out on savings interest,” commented Chris Irwin, Director of Savings at Yorkshire Building Society.

“It’s encouraging to see that for a small number of people they have made moves to improve the situation, however, there is still an incredible amount of money not earning returns like they could be,” he added.

Should you consider switching?

Moving your money from a current to a savings account with higher interest can be a good way to grow your pot over time.

“It’s quick and easy to switch accounts to chase a better return of interest, but some may feel it’s not worth doing if their priorities are focused on using their savings to cover the cost of living,” explained Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

However, savings rates have “changed considerably over the past 12 months”, according to Springall, with certain sectors seeing average returns rise for the first time since last year.

Furthermore, inflation has since lowered to the Bank of England’s target of 2% (its lowest point for almost three years), giving people the opportunity to see their savings grow in real terms.

Make sure you’re getting the best returns

Despite almost three quarters (72%) of people saying they’d checked the interest rates on their savings in the past six months, over half (55%) haven’t switched accounts in the past year.

Nearly 13 million current accounts in the UK are still holding balances above £5,001, with the average balance being £23,700.

Sitting in an account earning a weighted average of 0.05% (according to YBS and CACI), the amount of interest this sum could earn in a year would be around just £11.

Meanwhile, applying the leading easy access rate (currently 5.20% AER at time of writing) would instead earn you over £1,200.

“Consumers will have different reasons for why they save and how, but it is essential they check that their account is paying a decent return of interest on their hard-earned cash,” said Springall.

Make sure to visit our charts to compare top rates and check you’re getting the best returns.