ZERO Lowest Interest Rate on Savings Accounts

ZERO Lowest Interest Rate on Savings Accounts.

The Financial Conduct Authority (FCA) has announced proposals to counter low interest rates on bank and building society savings accounts and promote competition.

We have been in a sustained period of low central bank interest rates for a number of years now. However, whilst a bank can borrow from the Bank of England at a base rate of 0.5%, most bank and building societies also offer rates to savers at similar low levels but then lend both central bank money and savers money out to borrowers in the form of mortgages, credit cards and loans at interest rates of anything between 3% per annum for a mortgage, 8% and 10% per annum for a loan and 20% plus per annum for credit cards, all after introductory rates have expired.

With effect from December 2016, the FCA has confirmed that banking groups will be required to provide clear information on the current interest rates they are paying as well as reminding you when interest rates change or when and introductory offer period has ended.

Competition

Combining the above requirement to highlight current interest rates payable to you alongside the easy switching facility that banks now offer to move accounts, the FCA hopes that this will provide enough stimulus for banks to become more competitive as consumer awareness of any low interest rates they are receiving becomes easier to identify.

Zero % - FCA Publishes Regular Lists

As part of this push, the FCA is also publishing lists of the lowest interest rates currently being paid. Staggeringly, in their first publication the lowest interest rates they found for savings accounts were as low as Zero % on a savings account:

Lowest Easy Access Savings Accounts

• Branch Access - Open account 0.01% pa, Closed account 0.01%pa
• Postal/Internet/No Branch Access - Open account 0.05% pa, Closed account 0.00%pa

Lowest Easy Access Cash ISA

• Branch Access - Open account 0.01% pa, Closed account 0.05%pa
• Postal/Internet/No Branch Access - Open account 0.50% pa, Closed account 0.25%pa

Comment

We are delighted that the FCA is forcing banking groups to clearly highlight current interest rates payable and also the fact that they are working with banking groups to improve the speed and ease with which people can transfer not just their current account but also cash savings accounts and cash ISA accounts.

Your task for this weekend: find your most recent cash savings bank statements or login online to find out exactly what interest rate you are currently receiving on your easy access savings accounts and cash ISA accounts.