Earn 200 times the interest by ditching your high street bank

Savers with small pots can earn hundreds of times more interest by switching away from high street banks.

Easy-access savers can earn a 2pc bonus on pots up to £3,000 with financial coaching app Claro Money – some 200 times greater than the interest offered by most high street banks.

Claro Money is a new subscriptionbased app. It is currently giving away a year’s free subscription but savers may be charged after this period ends. Cash pots are covered by the Financial Services Compensation Scheme, and saved in a NatWest account.

Meanwhile, building society savers are reaping the rewards of loyalty by earning 33 times the interest offered by high street banks on fixed-rate bonds.

No widely available savings deals beat inflation, currently at 3.1pc, meaning savers’ pots will diminish in real terms over the coming year. However, Cambridge Building Society offers 5pc on pots up to £3,000, but only for savers who have been with the provider for three years. This is 3.55 percentage points more than the next best deal.

Joanne Turner, 51, from Cambourne,

Cambridgeshire, a saver with the society’s Extra Reward Regular Saver account, said: “I don’t tend to save with high street banks because I don’t like the online banking. I like to lock my money in so I can’t touch it.

“My husband and I don’t have a mortgage and so are hoping to push our savings up. Inflation has been going up but this account is helping.”

For those with even smaller sums, some current accounts offer better rates than dedicated savings accounts. Virgin Money’s M Plus account offers 2.02pc interest on balances up to £1,000. Nationwide’s FlexDirect pays an interest rate of 2pc, on balances up to £1,500. It requires £1,000 to be paid in each month.

There are caveats, however. Only new customers can join Virgin’s deal. Nationwide’s rate is only paid for the first year, after which it drops to 0.25pc.