High street banks are not informing customers of interest rate changes to their accounts, according to consumer magazine Which? Money.
Out of the 12 banks and building societies investigated, only four personally told customers about savings rate changes. Other savings providers, such as HSBC, used adverts in newspapers to notify customers of small cuts and fluctuations but this was only if the rates were cut to more that 0.25 per cent or 0.5 per cent over the course of the year.
ING Direct, First Direct, Co-op and Cheltenham & Gloucester were the four who used email alerts or letters to ensure that all customers were informed of the current savings rate on their personal accounts. Barclays was the only bank to notify customers two months in advance of any proposed changes by letter.
Chief Executive at Which? Peter Vicary-Smith said: “Our rigorous research shows that outdated and inconvenient methods of notice on interest rate changes are keeping savers in the dark for longer, at a time when they need greater disclosure than ever before”.
He added: “This is just another example of banks treating their customers badly. As our latest savings satisfaction survey shows, once again it’s the smaller players that offer better service and have happier customers”.
We advise people to check that their existing accounts are paying competitive rates of interest on a regular basis and if the rate has fallen to move their savings to a more attractive account.
Consulting savings account comparison tables or tools can be a useful resource for finding accounts paying the highest rates of interest.
Fixed rate bonds tend to provide the best rate of interest, with the rate rising the longer that you are prepared to tie up your savings.
ISAs can also provide attractive returns as the interest is tax free. ISAs with fixed terms are also available, again with the rate of interest rising the longer that you are prepared to save for. ISAs allow a maximum annual investment of £5,100.