Check the interest on your savings

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The £12bn Great British Savings Scandal Savers lose an average £322 in interest every year according to Which.

26 October 2010

Savers are missing out on more than £12bn a year by keeping their money in accounts that pay miserly rates, according to new Which? research.

Almost half of the 1,200 plus savings accounts available in the UK pay 0.5% interest or less and one in four pays 0.1% or less – just £1 a year for every £1,000 saved.

If people with easy-access and notice savings accounts and cash Isas moved their money to best rate versions of those accounts, British savers would be £12bn a year better off. That’s equivalent to £322 for every saver with an easy access or notice savings account or cash Isa.

Which? even found two accounts – Ulster Bank’s Easy Access Savings Account and Newcastle Building Society’s Nova Plus Issue 3 Account – that pay just 0.01%, an annual return of 10 pence for every £1,000 saved.

On 31 October 2010 Which? Went on to identify the ten most misleading savings account names

Accounts with names like ‘Halifax Liquid Gold’ and ‘NatWest Diamond Reserve’ might sound like they’re offering top interest rates to match, but they’re not. These are just two of the ten accounts Which? has found with big titles, but pitifully small rates – all paying 0.15% or less.

Halifax and NatWest are not the only banks to give low-paying accounts tempting names denoting wealth. Derbyshire Building Society and Northern Bank also have savings products which mention gold, even though they pay just 0.10%, and Santander goes ones better with its Platinum Savings Deposit.

Probably the most obviously misnamed account is Newcastle Building Society’s High/Extra High Interest Account. A more appropriate name might be the ‘extra low interest account’, as at a rate of just 0.01% it is actually the poorest paying account in the list drawn up by Which? and would give an annual return of just 10p on every £1,000 saved.

The ten most misleading savings account names found are:

  • Barclays Reward Saver
  • Derbyshire BS Triple Gold
  • Halifax Liquid Gold
  • Lloyds TSB Incentive Saver
  • NatWest Diamond Reserve
  • Newcastle BS High/Extra High Interest Account
  • Northern Bank (NI) Midas Gold
  • Norwich & Peterborough BS Super Saver
  • Santander Platinum Savings Deposit
  • The Co-operative Bank Save Wise

Which? chief executive, Peter Vicary-Smith, said: ‘This is proof that all that glitters isn’t gold. It’s just embarrassing that a company can call a product “extra high interest” when, in reality, it only pays out 0.01%. Surely it’s time for banks and building societies to clean up their act and ensure that their products do what they say on the tin.’

The full article is available on the website of Which? by clicking here.