Savings rates rise – but not in branches
SAVERS who prefer to stick to High Street accounts are being left out in the cold.
A flurry of accounts paying top rates of interest are mostly available only to those willing to run their accounts online.
Renewed competition among new banks and building societies means some easy-access accounts pay 1 pc or more.
But those who want a High Street account are seeing little benefit.
Among the best online rates are Charter Savings Bank Easy Access at 1.01 pc; Bank of Cyprus UK’s Online Easy Access at 1.05 pc; Tesco Bank Internet Saver at 1.01 pc; Leeds BS Limited Issue Online Access at 1.05 pc; and AA Savings Member Saver and Kent Reliance Easy Access 18, both at 1 pc.
But with one exception, they are available only online. You can open and run the Kent Reliance account through its branches. But there are only eight, all in and around Kent.
The AA Savings Member Saver is also available by phone.
Typically, there is a huge difference between rates depending on how you run your account, even among the same providers. Leeds BS pays 1.05 pc on its new online-only account, but only 0.5pc on its branchbased Access Saver. Tesco Bank’s 1.01 pc for online savers is four times higher than the 0.25 pc it offers those in its Instant Access, which is available in some of its stores.
Post Office works in the same way — 1.01 pc on its Online Saver 24, but just 0.5pc on its branch Instant Saver, which drops to 0.1pc after 12 months.
‘There are many savers, especially older ones, who prefer to deal with human beings when managing their cash,’ says Susan Hannums, director at the advice site Savings Champion. ‘This group of savers is being ignored.
‘The rise of internetonly accounts is little comfort to those who are desperate for better rates, but don’t wish to use a computer or don’t have access to one.
‘The recent launch of internetonly bonds from NS&I, which once sold its products via the Post Office, is a prime example.’
Rachel Springall, financial expert at data monitor Moneyfacts, says: ‘This month we’ve had new deals and rate rises that are available only online, such as Charter Savings Bank, Tesco Bank and Leeds BS. Savers who don’t or can’t bank online are missing out.’ The top branch-based account after Kent Reliance comes from Coventry BS, paying 0.85pc on its Easy Access Saver. But you need to live near its 70 branches in the Midlands, Oxfordshire, Gloucestershire and Wiltshire to use it unless you are willing to go online or run it over the phone or by post. Big banks with large branch networks are notable for their lack of decent rates, paying as little as 0.01 pc. Halifax Everyday Saver pays 0.25pc, Lloyds Easy Saver 0.1 pc and Barclays Everyday Saver 0.05pc. NatWest Instant Saver pays just 0.01 pc. Even Nationwide, the largest building society, pays only 0.1 pc on its Instant Access Saver, but it does reward its loyal members with rates of up to 0.75 pc.