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Loyal savers miss out on new savings account rates

03 September 2009 / by Andy Davies

Savers who shop around and change variable rate savings accounts on a regular basis are likely to enjoy better rates than loyal savers who stick with the same account, according to Defaqto.

The average gross AER on instant access savings accounts with a £1,000 balance launched before 2009 is 0.68 per cent compared to 1.93 per cent for such accounts launched in 2009.

For a basic rate tax payer this means they would receive £5.44 on an account paying 0.68 per cent, while savers with a 1.93 per cent account could receive £15.44.

The independent financial data collection company suggests that the loyalty of savers seems to reward "the provider rather than the customer".

Commenting on these findings, David Black, banks specialist at Defaqto, said: "Anyone who has had the same variable rate savings account for a while can almost certainly get a better deal by transferring their funds to a new account."

Mr Black says it has been well documented that many instant and easy access accounts have introductory bonuses, but he said: "The current low rate environment it makes sense to take advantage of such bonuses but remember to reassess the account's competitiveness periodically but do make sure that any withdrawal conditions are acceptable before you open a savings account."

Mr Black added: "Savers need to wake up to what is happening and get a better return on their funds by proactively jettisoning loyalty as it simply isn't paying."

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