Now easy access rates to hit 3.75%

SAVERS are in line for big boosts to interest rates on easy-access accounts, experts say. These deals are tipped to be the main battleground as banks fight for savings customers. Building societies and smaller banks have already announced a fresh round of interest rate increases in the coming weeks and easy-access rates are expected to rise as high as 3.75 pc.

Pressure has ramped up on banks to increase interest rates after the Bank of England pushed up base rate from 4.25 pc to 4.5 pc last week.

This marked its 12th base rate increase in 18 months — the sharpest rise since 1989.

Kevin Mountford, from savings platform Raisin, says: ‘Savers want to keep their money close at hand and you can expect rates to end up north of 3.5 pc and as high at 3.75 pc.’

Savers are less likely to see large increases to fixed-rate accounts. This is because savings providers believe last week’s base rate rise could be one of the last and rates could even fall in the coming months. Chip, the appbased savings account, raised its rate earlier this month to a top 3.71 pc in anticipation of the Bank of England’s move.

Yesterday GB Bank pushed up the rate on its Easy Saver to 3.7 pc while Ford Money’s rate is up from 3.45 pc to 3.6 pc. Cambridge BS is raising the rate on its Your Saver easy-access account to 3.5 pc today.

Yorkshire BS rates go up from today by 0.25 percentage points in line with base rate. Its branchbased Access Saver Plus Issue 7 will pay 3.05 pc and its Internet Saver account between 3.25 pc and 3.5 pc depending on how much is in your account.

At Coventry, rates will tick up on June 1 by up to 0.25 points. Its top easy-access rate on the Limited Access Saver (Online) account will be 3.6 pc.

Rates at Skipton rise this month too with its Branch Tracker Issue 4 up from 3.15 pc to 3.4 pc. Its other variable savings rates will increase 0.25 points from Monday.

But Britain’s biggest banks are still dragging their heels.

Rates are unlikely to match any rise in base rate with the large banks, the Treasury Committee, a group of influential MPs, has warned.

This is because big banks are keeping record profits for themselves by increasing rates on mortgages and loans but not savings accounts.

Earlier this year, the big four — Barclays, Natwest, HSBC and Lloyds Banking Group — got a dressing down from the Treasury Committee for failing to pass on base rate rises to their savers. They pay between 0.7 and 1.3 pc on easyaccess accounts — less than half the rate of smaller competitors.

That is despite base rate rising by 4.4 percentage points from 0.1 pc in December 2021. During that time, the High Street banks have passed on as little as 0.69 points.

Savers with £10,000 in one of these will earn £70 a year in interest, compared with £371 with Chip, £370 with GB Bank or £365 with Shawbrook Bank.

Harriett Baldwin MP, chair of the Treasury Committee, is urging savers to find better deals by switching accounts. She says: ‘This will drive the banks to increase their currently measly rates.’

The big banks do pay well on some accounts, but these tend to come with terms and conditions you must obey to earn the headline rate.

For example, Barclays pays 5.12 pc on its Rainy Day Saver account but only on the first £5,000 saved in the account. NatWest pays 6.17 pc to current account customers opening its Digital Regular Saver on savings of between £1 and £150 a month, but again only on balances up to £5,000.

Any savings over £5,000 earn you 1 pc with NatWest and just 0.7 pc with Barclays.

Others showcase higher rates but these usually only last for a year.

Your money is then automatically shifted into another account where the rate can be as little as 0.7 pc.

For example, Halifax Reward Bonus currently pays 3 pc. But once you have been in the account for 12 months you are moved to Instant Saver, which pays just 0.9 pc.