Savers may be significantly underestimating the rates of interest they are receiving from high street banks, according to a survey.
People were asked what rate they were getting on their easy access money, and where it was saved.
This was then compared with rates available on easy access savings from banks.
The research, commissioned by financial services firm Hargreaves Lansdown, found that savers typically thought they were getting around 0.4% with Barclays.
But Barclays’ “everyday saver” account pays 0.01% on sums below £50,000 – suggesting that some people surveyed may have been overestimating the rate they were on if they had this account.
It’s an expensive mistake to make
Sarah Coles, Hargreaves Lansdown
A quarter (25%) of people who said they were with NatWest thought they were making more than 1%. NatWest’s “instant saver” account pays 0.1%.
Some 2,000 people were surveyed by Opinium for Hargreaves Lansdown in April 2022.
The savings account data used by Hargreaves Lansdown was limited to easy access branch accounts without restrictions – a type of account that many people are likely to have.
Some savings accounts offered by high street banks have significantly higher rates – for example, NatWest also offers a “digital regular saver” account which pays 3.25% gross interest on balances up to £1,000. Savers can pay in up to £150 per month.
A NatWest spokesperson said: “We offer customers on our flagship digital regular saver account 3.25% on balances up to £1,000, making this account one of the leading regular saver products available in the UK.
“The account, aimed at motivating customers to start a regular savings habit, currently pays a rate of 0.30% on balances of £1,001 up to £5,000 and 0.10% over £5,000.
We offer customers on our flagship digital regular saver account, 3.25% on balances up to £1,000, making this account one of the leading regular saver products available in the UK
“Customers can check their easy access savings account rate with us at any time through our mobile app, or online banking.
“Our savings products are supported by a range of digital tools, including ’round-ups’, which rounds up the spare change from your debit card purchases into your savings account.”
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “On average, Barclays savers thought they were making 40 times the interest (0.4%).
“The next biggest gap was at NatWest, where savers make 0.1%, but on average they think they’re getting 0.8%.
“It’s an expensive mistake to make, especially at the moment while inflation is running rampant.
“We can’t afford for our money to be languishing in savings accounts paying a small fraction of a percent.
“It means we all need to revisit our savings and find out just how much we’re making on our money.”
She added: “Right now, it’s possible to earn 1.56% from Virgin, if you’re prepared to open a current account, or 1.33% from Yorkshire Building Society, with no strings attached.”
Ms Coles said: “Once you have an emergency savings safety net of three to six months’ worth of expenses in an easy access account, you can make the rest of your savings work even harder.
“If you’re prepared to tie your money up for a fixed period, you could make an even better return, because right now you can make as much as 2.4% over a year or 2.8% over two years.”