Big banks are still “failing” to be competitive with the rest of the savings market by offering low interest rates on easy access accounts.
This comes despite the Financial Conduct Authority (FCA) launching a crackdown in summer on banks neglecting to pass on the Bank of England Base Rate increases to customers.
According to an analysis from Moneyfactscompare.co.uk, Barclays, HSBC, Lloyds Bank, NatWest, and Santander’s flexible easy access accounts all remain in the bottom quartiles.
James Hyde, a spokesperson at Moneyfacts, said: “Despite the increased focus on the passing of interest rates onto savers, the big banks have on the whole failed to make their easy access rates more competitive relative to the rest of the market.
“The Financial Conduct Authority’s championing of Consumer Duty challenged banks to price their portfolios competitively, and while their fixed bonds are hitting the mark, some no-notice accounts continue to be worse than average.”
Lloyds Bank’s Easy Saver is currently offering an Annual Equivalent Rate (AER) of 1.4 per cent. Barclays‘ Everyday Saver is offering a slightly higher AER of 1.65 per cent.
NatWest’s Flexible Saver is offering an AER of 1.74 per cent, while HSBC’s Flexible Saver (Standard) is offering an AER of 1.98 per cent.
Santander’s Easy Access Saver, available to new customers, is offering the highest rate of them all with an AER of 2.5 per cent.
Mr Hyde said: “Of the highlighted easy access accounts belonging to the big five banks, only NatWest has seen its option improve its quartile ranking in the past three months – rising to the third quartile from the fourth (bottom).
“Elsewhere, Barclays Bank, HSBC and Santander remain in the third quartile, while Lloyds Bank remains rooted in the bottom tier with an easy access rate of just 1.4 per cent.
“All four of these accounts have seen rates increased in recent months, but these increases have failed to yield an improved position compared to the rest of the market.”
However, these high street banks do all currently offer fixed bonds that sit in the top quartile of the market, Moneyfacts’ analysis shows.
Mr Hyde said: “The better news is that all five providers do offer fixed rate bonds sitting in the top quartile of the market, showing they are willing to pay good returns on accounts which guarantee their capital over a certain period.”
Barclays Bank’s one-year fixed rate bond and ISA pay 5.35 percent and 5.25 percent gross respectively and both sit in the top quartile.
HSBC’s Fixed Rate Savings paying gross rates of 5.10 per cent for two years and 5.3 per cent for one year are available to new and existing HSBC current or savings account holders. Both accounts take a place in the first quartile.
All the bonds offered by Lloyds Bank sit in the first quartile, while Santander sees its one-year fixed bonds reach the top quartile, with other terms falling into the second quartile.
Meanwhile, NatWest offers fixed ISAs paying 5.26 per cent and 5.01 per cent gross respectively for terms of one and two years, placing them in the top quartile.
Mr Hyde added: “As always, it is down to customers to proactively monitor savings rates and switch if they discover they can do better.”
