Majority of Saveholders Remain Unaware of Earnings From Their Savings Accounts
Half of folks remain clueless about their savings account's interest rate, research shows. A staggering 59% of savers don't know the rate on their main savings account, according to consultancy firm Accenture.
To make matters worse, nearly a quarter won't switch to a provider offering a better deal, potentially missing out on significant sums. This apathy towards savings and banks persists despite decent savings rates being within reach.
High-interest savings accounts on average pay 4.75% while some cash ISAs go as high as 5.7%. Yet, 29 million people leave £20 billion in interest unclaimed annually by keeping their money in low-interest current accounts or savings accounts.
Unfortunately, many people seem disengaged, with one in three having £5,000 sitting idle in their current account, and the average balance being £2,067. While some current accounts pay interest, the rate is usually less than that of a savings account.
Big banks' meager savings rates contribute to this indifference. Though the average easy-access account pays 2.78%, according to Moneyfacts Compare, the average interest offered by high-street banks is a paltry 1.25%.
Apathy from savers is a larger issue when it comes to actively seeking the best account for their money's growth. This inertia doesn't translate into loyal customers for banks, but customers still quickly switch for perks.
Sixty-seven percent of consumers hold multiple bank accounts, challenging traditional bank loyalty. In the past 12 months, over 1 million bank account switches were recorded, with 222,805 happening in the first three months of the year.
Many customers flock to new bank accounts and abandon their main bank without a second thought if the new account offers a cash bonus on joining. Nationwide Building Society gained 81,584 new customers in the last three months of 2024 for this reason alone.
Some customers seek perks of a different kind, with almost half interested in personalized retirement planning tools, 43% wanting access to financial wellness programs, and 43% valuing financial coaching or advisory sessions. Rebecca Bezzina of Accenture comments, "In a world where switching is easy and loyalty is passive, it's no longer enough to be the default option. Customers want more than functional service; they want to feel understood, valued, and supported in their financial lives.'"
For those seeking help, This is Money offers savings alerts to keep you informed about the best deals as soon as they become available. Sign up for savings alerts in the box below or learn more about our savings alerts here.
Top Easy-Access Savings Rates
- Chip Easy Access Account: Offers a boosted rate of 4.76% AER for the first 12 months for new customers (using promo code GETCHIP), falling to 3.56% thereafter. Up to £1 million can be deposited, with three penalty-free withdrawals per year. Interest is paid monthly.
- Sidekick Money Sidekick High Yield Cash Reserve: Provides 4.76% AER on balances between £1,000 and £34,999, with a 0.72% bonus for the first 12 months. For balances above £35,000, the rate is 4.04% with no bonus. Unlimited withdrawals are allowed. A minimum deposit of £1,000 is required.
- Ulster Bank Loyalty Saver: Offers 4.75% AER annually with no minimum deposit required. However, balances under £5,000 attract a lower rate of 2.00% AER. Contributions and withdrawals are possible, and the account can be accessed online, by phone, or app. Requires you to be a current or new account customer of Ulster Bank.
- Chetwood Bank Easy Access Account: Pays 4.71% AER monthly, has no minimum deposit, and allows one withdrawal per day with next working day access to funds. Contributions can be unrestricted, but all transactions must be made through a nominated account.
Top Cash ISA Rates
- Easy Access Cash ISA: Offers 5.07% AER with no fixed term or notice period required.
- Lifetime ISA: Provides 4.7% AER but with potential penalties on withdrawals.
- Fixed Rate Cash ISA (1 year): Available at 4.35% AER with a 1-year fixed term.
- Notice Cash ISA (60 days): Offers 4.5% AER with a 60-day notice period.
- Research shows half of people are unaware of their savings account's interest rate, and a significant portion don't switch to a better deal, potentially missing out on substantial sums.
- High-interest savings accounts and cash ISAs are within reach, with average rates of 4.75% and 5.7% respectively, while some bank accounts pay less than that.
- Many people leave unclaimed interest worth £20 billion annually by keeping their money in low-interest current or savings accounts.
- Big banks' low savings rates contribute to indifference, with the average easy-access account paying just 2.78%, according to Moneyfacts Compare.
- Sixty-seven percent of consumers hold multiple bank accounts, challenging traditional bank loyalty, and many switch for cash bonuses or personalized retirement planning tools, financial wellness programs, or financial coaching. Rebecca Bezzina of Accenture comments on customers wanting more than functional service and feeling understood, valued, and supported in their financial lives.
