Posted April 16, 2011 by Simon in News

Banks Urged to Show Savings Rates in Online Banking Service

Three of Britain’s biggest savings providers have thrown their support behind This is Money’s drive to get banks and societies to display customers’ individual savings rates on their online banking pages.

Since launching the campaign in March, they’ve been urging banks to sign up to a revolutionary move to end the great interest rate cover-up.  Currently Halifax and Yorkshire Building Society are the only two banks that display your personal rate on your account page.

Both said they support the campaign, while Nationwide says it will look to display rates.

Banks either send an annual statement with a ‘current rate’, or require savers to sift through pages of account names and numbers to find out their up-to-date return.

Eight of the best ten no notice savings accounts in This is Money’s tables include a bonus-style clause, while 20{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} of all today’s easy access rates are sold with a teaser.  Banks love this bonus game, using a juicy ‘introductory’ teaser and then leaving you floundering on a sub-1{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} rate when it expires in 12 months’ time.

The danger is just as stark on fixed rate bonds, where most banks ship savers off to miserable 0.5{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1}-or-worse variable accounts when the term expires.

Both Halifax and Yorkshire Building Society said they are in full support of This is Money’s campaign for greater honesty.  Nationwide told This is Money it is ‘very positive’ about online rate display and it’s ‘something we’re looking to deliver’.  Britain’s biggest building society said: ‘We are keen to explore this – it fits in with our savings promises that are all about transparency for savers.’

This is Money is in discussion with HSBC, Barclays and other big providers about making a change they think could change our savings culture for good and foster genuine honesty.

Today’s low base rate, which has been stuck at 0.5{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} for 25 months, has put savers at greater risk. Banks can pay as little as 0.1{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} (0.08{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} after basic rate tax) to loyal savers who have been with them for over a year.

Tesco Bank recently increased the rate on its Internet Saver account to 2.9{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} (2.32{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1}), including a 1.32 (1.65) percentage point bonus for new savers.  The rate puts it just behind Santander eSaver Issue 3 (with a 2.5 [2] percentage bonus) and ING Direct Savings, which have been pushed up to 3{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} (2.4{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1}) before tax.  Both plunge to 0.5{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} (0.4{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1}) once you have had the account for 12 months.