Building societies are consistently paying better rates to savers than their competitors, independent research from SavingsChampion.co.uk reveals.
On the day that the FCA has issued its report into the cash savings market, data shows that in relation to variable rate savings accounts throughout 2014:
78% of accounts at building societies paid interest above the base rate, compared to 56% of similar accounts on offer from all other providers.
The average interest rate from building societies was 1.30% versus 0.95% from other providers.
Building societies reward their existing savers. Rates on ‘closed’ variable rate savings accounts were on average 0.06% higher than the rates paid on new accounts.
The reverse is true for all other providers with rates for ‘closed accounts’ an average of 0.05% less than those paid on new accounts.
Susan Hannums, Director at SavingsChampion.co.uk said:
"Building societies continue to outperform banks, especially in recent years as many of the leading high street providers have retracted from the savings market, showing less desire to hold on to existing or attract new savers in the form of competitive rates. We believe that all savers should be treated fairly and not penalised for their loyalty with lower rates of interest.”
Brian Morris, Head of Savings Policy at the BSA commented:
"This data from SavingsChampion.co.uk shows that building societies have a good track record of giving savers a fair deal. Not only are average interest rates higher at building societies, but savers in closed accounts are not disadvantaged relative to new customers. The FCA is today proposing a range of remedies designed to improve the cash savings market, including some relating to better disclosure of interest rate changes, which we proposed. We will be studying the detail of their proposed package with interest".
Notes to editors
Data source SavingsChampion.co.uk gathered from 127 UK banks and building societies monitoring all live and closed savings account from November 2011 to December 2014.
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