Savings deals that you MUST ditch right away

TODAY, Money Mail names the savings accounts and Isas you need to ditch right now.

A string of cuts in the pipeline will see rates on accounts offered by the big banks cut to as little as 0.01 pc. At best, you will earn only 0.25 pc.

Better rates — in some cases worth four times as much interest each year — are on offer from other providers.

More than seven in ten of us simply open a savings account with the same bank that runs our current account.

That approach worked when the big banks wanted to attract our money and touted top deals.

But now they don’t want our cash — so they’re paying virtually no interest at all.

Banks were already hacking back their rates before the fall in Bank of England base-rate from 0.5 pc to 0.25 pc at the start of last month. Now they are at it again.

NatWest will pay 0.01 pc on its easy-access account, Instant Saver and Cash Isa by the end of October — or 10p interest on £1,000 for a year.

If you switch to a better deal now, such as the 1 pc deal from Virgin Money and Coventry BS, you can boost your return to £10 on each £1,000 — or £100 on each £10,000 of savings.

The NatWest cash Isa, once a top-payer, will pay 0.01pc on up to £25,000 — and only 0.05pc, down from its current 0.5 pc, on sums above this.

This time last year, you earned a much better 1pc. So your rate will have tumbled by as much as 0.95 percentage points, against a much lower 0.25-point fall in base rate.

For balances above £50,000, NatWest’s cash Isa rate drops from its current 0.75 pc to 0.2 pc.

Barclays’s Everyday Saver account is also set to drop to a lowly 0.05 pc from December 1. Its Instant Cash Isa, also once a top-payer, will fall to 0.4 pc on balances up to £30,000, and 0.6 pc on higher amounts.

This time last year, it paid 1.28pc on sums up to £15,000, 1.38 pc on £15,000 to £30,000 and 1.48 pc above this level.

From tomorrow, HSBC’s Loyalty Cash Isa customers will take another hit. The rate for standard current account customers falls to 0.7 pc from 1.1 pc. At the start of this year, it paid 1.29 pc. And from November 1, Santander’s rates will also fall. Its Easy Isa will pay just 0.1 pc on up to £40,000. You’ll do no better in its Isa Saver with balances up to £10,000. This is the account you end up in after a year if you open a Direct Isa or E-Isa with the bank. Savers have seen their rates slashed this year by as much as 0.5 percentage points against a fall in base rate of 0.25 points. At the start of this year, you earned 0.5pc on sums up to £10,000 and a better 1 pc on £10,000 plus. But cuts in February, along with those to come, bring the rates down to a paltry 0.1pc and 0.5 pc respectively. With both Halifax and Lloyds Bank you earn between 0.1 pc and 0.25 pc once you have been in their easy-access or variable rate cash Isas for a year. Better deals are available with other providers (see table above).

In easy-access accounts a better 1 pc is on offer both online and in the High Street. The best deals include Family Building Society at 1.09 pc.

To transfer your cash Isa, ask your newly chosen provider to organise the switch for you. Make sure it accepts transfers — not all do.

For example, Coventry BS at 1.1pc and National Savings & Investments at 1 pc don’t.

To open an ordinary easyaccess account online, put in the minimum funds you need at the start, then add the rest of your savings once it is up and running.

Under money laundering rules, you have to provide proof of who you are and where you live to open one.

Your passport, driving licence or a recent copy of a letter from HM Revenue and Customs or the Department of Work and Pensions will work — but check with the provider first.