Moneyfacts: Big banks’ flexible savings rates fail to improve

The biggest banks’ most flexible easy access accounts rest towards the bottom quartiles of the market, as they did last year, according to analysis from Moneyfacts. In contrast, their fixed rate bonds on offer sit in the top and second quartiles.

Our Moneyfacts Consumer Duty Audit Tool for Savings shows that, despite offering fixed accounts that sit within or towards the top quartile of the market, rates offered on flexible easy access accounts by these providers still fail to come anywhere near the market-leaders.

• The big banks’ flexible easy access accounts* rest in the bottom quartiles: Barclays Bank (third quartile), HSBC (third quartile), Lloyds Bank (bottom quartile), NatWest (third quartile), and Santander (third quartile). In August 2023, none of these banks made it into the top or second quartiles.
• The biggest high street banks currently offer fixed bonds that sit either in the top or second quartile of the market: Barclays Bank (top quartile), HSBC (first and second quartile), Lloyds Bank (first and second quartile), NatWest (first and second quartile) and Santander (second quartile).

Rachel Springall, Finance Expert at Moneyfacts, said:

“There is a clear disparity between the positioning of products from the biggest banks on their fixed rate bonds compared to their most flexible accounts. Traditionally easy access accounts would pay lower rates than fixed, but where the biggest banks’ fixed bonds are sitting towards the top end quartiles in the market, their easy access offers are towards the bottom. This shows why savers should avoid putting all their cash with one brand for convenience, as better rates could be available elsewhere which can depend on the type of accounts.

“The big banks’ most flexible accounts* pay an average rate of 1.64% gross between them, which is significantly lower than the market average rate of 3.08% gross, based on a £10,000 deposit. This clearly demonstrates why savers need to look beyond the most familiar brands, as their loyalty is not being repaid. It is vital consumers regularly review and switch their easy access account to ensure they are earning a decent return. This is particularly true now that the market has had its first base rate cut in four years, which can be passed on to variable savings rates.

“The Consumer Duty rules from the Financial Conduct Authority (FCA) are designed to provide better value for consumers, and it will be up to providers to ensure they are offering their customers fair value. However, it will be down to savers to proactively keep on top of the rates and service they receive and be sure to complain if they are treated poorly. There are many more brands out there to choose from and so long as they are protected by the Financial Services Compensation Scheme (FSCS), there is little reason to disregard them.”

*Big bank easy access selection: Barclays Bank, Everyday Saver, 1.65%. HSBC, Flexible Saver (Standard), 1.98%. Lloyds Bank, Easy Saver, 1.30%. NatWest, Flexible Saver, (Formally Premium Saver), 1.59%. Santander, Easy Access Saver, (Formally eSaver), 1.70%.

Fixed bond data extracts from using the Moneyfacts Consumer Duty Tool for Savings for one- and two-year bonds (Data correct as of 2 September 2024):

• Barclays Bank – The one-year fixed bond pays 4.30% and takes a place in the first quartile in its sector, available to new and existing customers.
• HSBC – Fixed Rate Savings pay gross rates of 4.45% for a one-year bond and 4.10% for a two-year bond which are available to new and existing HSBC current account holders. The one-year bond sits in the first quartile, the two-year bond in the second quartile.
• Lloyds Bank – New customers are eligible for interest of 4.20% on a one-year bond and 3.85% for two years. These bonds both sit in the second quartiles. Customers who have held a current account for at least 40 days will benefit from an additional 0.10% on a one-year bond and 0.05% on a two-year bond. The one-year bond at 4.30% sits in the first quartile and the two-year bond at 3.90% sits in the second quartile.
• NatWest – New customers are eligible for interest of 4.27% on a one-year bond and 3.93% for two years. The one-year bond sits in the first quartile and the two-year bond in the second quartile.
• Santander – New customers are eligible for interest of 4.00% on a one-year bond and 3.60% for two years. These bonds both sit in the second quartiles.