• More than two in five (42%) savers look for the top rate offered when opening a savings account
  • Whilst one in seven (14%) choose a savings account based on tax efficiency
  • Despite rate being the top consideration for savers, almost one in five (19%) admit they have no idea what interest rate they’ve got
  • Two in five (40%) also admit they don’t know how much money from interest they’re earning – if any – each year on their savings.
  • Over a quarter (29%) of savers who have not changed to a new savings account and/or opened an additional savings account in the last 12 months don’t know what their interest rate is.

 

Top Ten Features Savers Look For When Opening An Account

 

  1. Top rate offered – 42%
  2. Easy access to my cash – 40%
  3. The ability to manage my account online – 33%
  4. FSCS protection – 24%
  5. A smooth quick application process – 17%
  6. The ability to physically manage my account in a branch or over the phone – 14%
  7. Tax efficiency of the product i.e., using an ISA – 14%
  8. The terms of the product i.e., if the new account had a notice period – 10%
  9. The product is being offered by a familiar brand – 10%
  10. If there’s a financial incentive other than interest rate associated with the product – 10%

 
Adam Thrower, Head of Savings at Shawbrook comments: “For many savers, their accounts become a forgotten corner of their finances. This can be a costly oversight, as sticking with an uncompetitive rate could mean missing out on potentially hundreds of pounds in additional returns. A quick five-minute check could reveal a significant difference in interest, boosting their savings pot. With interest rates expected to peak soon, now is the time for savers to be proactive and ensure their hard-earned money is working as hard as it can for them.”

 

To help those who might be nervous about moving their savings, Adam Thrower, Head of Savings at Shawbrook has the following top tips:

 

  1. Go back to basics

 
Before making any decisions on where to keep your money, go back to basics and check what your current savings rate is. With two in five (40%) savers admitting they don’t know how much interest they’re earning, many may be shocked to see just how low it is, or you might be pleasantly surprised to see you’re earning a good competitive rate. If the former, then check to see what other banks are paying and consider making the switch.
 

  1. Accreditation is key

 
Before moving any money to a bank or savings account, you should check that it is protected. Under the Financial Services Compensation Scheme (FSCS) you are covered if a bank or building society fails. If this happens then you can claim up to £85,000 per person back. You can check this on the FSCS website by entering the bank’s name to ensure your money is safeguarded.
 

  1. Don’t be put off by a lack of high street presence

 
Many of the leading savings providers do not have a high street presence and so, by limiting yourself to a ‘big name’ or only a bank with high street branches, you’re limiting your potential earnings. If the bank you’re interested in is protected by the FSCS and is offering a rate that is much better than your current rate, then make the switch.
 

  1. ISA or non-ISA

 
Another key consideration is tax. Many providers offer individual savings accounts (ISAs) which you can use to save up to £20,000 tax free per tax year. As interest rates have continued to rise, many might find themselves nearing the threshold for taxation on their interest income. Worryingly data from CACI* found nearly 4.2 million accounts were at risk of tax in September 2023, an increase of 900,000 since April 2023 highlighting why savers should consider the benefits of an ISA to reduce tax burdens.  Although do be mindful that they often come at a slightly lower interest rate.
 

  1. Use the right account for you

 
Every saver is different. Some might have a large amount of savings; others might be wanting to use an account for a rainy-day fund. Whatever it is you are saving for, or however much you are saving, choosing the right account is key. For those building a rainy-day fund, an easy access or notice account might be more suitable, as you can access your money without paying any early withdrawal fees.

“For others who might be saving towards retirement or have enough cash elsewhere to deal with any emergency expenditure, fixed-rate accounts could be the more suitable route for you. These accounts may require you to lock your money away for a fixed period, but could provide better rates in return. There are also no rules about how many non-ISA accounts you have, so you could also consider using a mixture of accounts to best fit your needs.”
 



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