Trust beats interest rates when choosing savings accounts

23 September 2008 / by Rachael Stiles
Brits value a bank's trustworthiness more than interest rates when it comes to choosing a savings account for any money left over after the rising cost of living has taken its share.

A stronger emphasis has been placed on saving recently, since the credit crunch highlighted the adverse affects of not having anything saved up for a rainy day, as mortgage rates and energy bills soar.

According to research from Chelsea Building Society, about half of Brits will only put their faith, and their cash, in a savings account with a provider that they can trust, regardless of the interest rate.

While 51 per cent of savers continue to value a high interest rate as the most important factor when picking savings accounts, the study of 1,000 UK consumers found that in times of economic uncertainty, trustworthiness comes out above other account features, such as online management, telephone services and gimmicks.

For half of British savers, their decision on provider is influenced by how much trust they have in them. Other things considered by savers when choosing a savings account include a quick response rates to complaints and enquiries, well trained staff, and a friendly service.

With a widening range of choice for savings accounts, it seems that longevity has no profound affect on the decision, with just 37 per cent of people citing this as something that would make or break a savings account for them.

"As the market continues to tighten and costs increase, savers need to know that the money they can actually afford to save is with a trusted provider." explained Darren Stevens, director of customer services at Chelsea Building Society.

"Despite the efforts providers put into promoting innovative online and telephone systems and the gimmicks they employ to entice savers, our recent research shows that these are having little effect upon today's consumers."

Savers have a lot of choice in the wake of the credit crunch, as providers strive to build up their deposits and lessen their reliance on mortgage lending.

New savings accounts are coming on the market all the time; this week have seen new additions to the product ranges at Barclays, now offering 6.3 per cent interest on its new high interest savings bond, and RBS, which has launched a number of new accounts including a competitive cash ISA which offers returns of 7.25 per cent.

© Fair Investment Company Ltd