Want to open a savings account? Here’s why a high street branch will offer you LOWER rates than online – and treat you as a second class citizen

SAVERS are being deprived of thousands of pounds of interest because banks and building societies are denying their best rates to customers who prefer to manage their accounts in branches, analysis by The Mail on Sunday reveals. Some banks and building societies are offering over ten times more interest on their best online savings accounts than on equivalent accounts managed in person.

In some cases, customers who do not bank online are being deprived of top-paying fixed-rate savings deals altogether.

Among the worst culprits are high street stalwarts including Santander, Nationwide Building Society and the Post Office.

Experts claim that providers which offer stingier rates to loyal, in-branch customers are doing so to maximise their own profits. Others suggest it appears to be another cynical ploy to push people away from branches to justify further closures.

Andrew Hagger, a personal finance expert at Moneycomms.co.uk, says: ‘Providers that do this are looking after their bottom line, as online accounts are cheaper to operate. But that doesn’t make it right.’

He adds: ‘Online rates have been better for some time, but the gap has really started to widen recently. Many providers are passing on rate rises to online customers – but not to those who prefer to bank offline.’

Derek French, founder of the Campaign for Community Banking Services, believes the discrepancy between online and offline savings rates is all part of the banks’ strategy to justify branch closures.

He says: ‘Banks say they are closing branches because their customers want to go digital. However, many don’t want to, but are forced to or they miss out on better savings deals. It is unacceptable that people who prefer to bank in person are disadvantaged in this way.’

Anna Bowes, co-founder of rate scrutineer Savings Champion, worries that the poor treatment of in-branch customers could not come at a worse time.

She says: ‘With the rising cost of living, most people are feeling the pinch. Those who do not bank online are more likely to be older savers who rely on the interest from their savings, and more vulnerable customers for whom higher interest could make all the difference.’

THE WORST CULPRITS OF BRANCH DISCRIMINATION

AMONG the worst offender is Santander, which pays £27.50 of interest on £1,000 in its online-only instant access account – but just £2 on its equivalent account that can be managed in branch.

Santander last week launched a table-topping instant access savings rate of 2.75 per cent. The eSaver Limited Edition is available until the start of next month – although it could be withdrawn sooner if demand is overwhelming – and can be opened with a minimum of £1 on balances up to £250,000.

But the account is only available to those who are happy to bank via a computer or smartphone as it must be either managed online or through mobile banking.

Santander customers who prefer to bank in branch or over the telephone are offered the Everyday Saver account. This pays just 0.2 per cent interest – 13 times less.

The situation is just as poor with easy access Isa accounts. Santander’s eIsa pays two per cent for 12 months on balances from £500, but must be managed through online and mobile banking.

By way of contrast, those who prefer banking offline receive just 0.2 per cent interest from an Easy Isa - on balances from £1.

A spokesperson for Santander says: ‘There will be times when products may vary due to different market conditions in the digital space, but our cross-channel products, including our 1 Year, 18 Month and 2 Year Cash Fixed Rate Isas, provide customers with some of the most competitive returns among both high street and digitalonly providers.’

MUTUALS AREN’T AS CUDDLY AS THEY SEEM

NATIONWIDE Building Society prides itself on its in-branch service. Unlike other providers that are shutting branches in droves, it has promised to leave no town or city currently served by the society without a branch until at least 2024 (it has though shut some branches). But when it comes to savings rates, it’s a different picture.

Nationwide’s 1 Year Fixed Rate Online Bond pays four per cent interest, but 3.25 per cent for customers who are not online. Similarly, its two-year fix is 4.5 per cent online or 3.5 per cent if not online. The 3 Year Fixed Rate Online Bond pays 4.75 per cent, but there is no equivalent bond for customers who prefer to bank offline.

Hagger says: ‘Nationwide’s adverts claim it is there for its members. But, actually it is not there for you if you don’t save online. There are two levels of service. If you go online it loves you and gives you the best deals. If not, you have to put up with what it gives you.’

A Nationwide spokesperson says: ‘We compete against both online and multi-channel providers. To ensure we can do so, we sometimes offer online operated accounts such as our Fixed Rate Online Bonds.’

It adds that branch staff will support non-digitally active members with opening Online Bonds on the online bank or mobile banking app.