Interest rates still unclear for more than 50% of savers

A recently conducted research survey recently discovered that interest rates on savings accounts available in the UK are still unclear for more than half of the nations savers, while nearly two out of every three are unsure if their banks are offering them the best rates.

52 per cent of the more than 1,000 savers surveyed by Nationwide recently admitted to not knowing exactly what the interest rate was on their savings accounts, with 59 per cent remarking that their banks and building societies could do more to make these headline rates clearer. Additionally, 62 per cent of the survey respondents said they were not sure if their bank was offering them the best possible rates.

Knowledge of your current interest rate is important because of the fluctuations that most savings products undergo once their initial bonus rate expires. The lion’s share of top savers and cash ISAs have a bonus rate that is typically two to three percentage points, leaving savings products with a paltry sub-1 per cent rate of return once the initial year is up.

One such example of this is the 3.24 per cent ING Direct savings product, which boasts a 12 month bonus rate of 2.74 percentage points. This means that savers who do not switch to a better account after the year is up stand to make only a paltry 0.50 per cent return.

Other banks, such as Halifax, offer even worse deals. The Halifax Online Saver is notorious for its 2.8 per cent rate of return for this reason alone – especially since 2.7 percentage points are pure bonus rate that expire after 12 months, leaving savers with 0.1 per cent in interest – which at that rate might as well be simply nothing at all.

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