Banks offering "derisory" rates

01 March 2006
A third of banks and building societies are still paying less than one per cent gross AER on savings accounts, according to new research.

A further one in ten accounts still pay under 0.5 per cent in interest, the study by Sainsbury's Bank has revealed.

The survey found that 33 per cent of banks and building societies still have one or more accounts which have a one per cent AER gross.

Sainsbury's is now calling on all banks and building societies to ensure they pay fair rates of interest on all their savings accounts in light of this research.

"It is simply not fair to offer such derisory rates of interest to savings account customers. It would appear that some banks may be offering unacceptably low rates of interest on some of their accounts to enable them to offer more competitive returns no others to attract new customers," said Peter Wood, director of savings at Sainsbury's Bank.

He also warned savers to make sure they keep a close watch on their rates and be prepared to change to a different account if they feel they are not receiving "consistently attractive returns".

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