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British banks pay as low as 0.01% interest to savers

The Financial Conduct Authority (FCA) has revealed that some savings and cash accounts in Britain are paying as low as 0.01% interest.

The FCA has published the data showing the lowest interest rates offered by 32 providers. The data is part of the FCA’s ‘sunlight remedy’, seeking to reveal firms’ strategies towards long-standing customers [1].

Some savers are unaware how little interest they are earning on their savings and may be better off switching to a new provider offering a better rate. The FCA wants to put pressure on providers who give poor returns to inform customers when there are better deals available.

Christopher Woolard, Director of Strategy and Competition at the FCA, said: “We said that one of our priorities this year will be focused on the treatment of long-standing customers. Our new rules, coming into force at the end of the year, will help consumers get the facts they need to make an informed decision about what to do with their savings” [2].

HSBC, Danske Bank, and Ulster Bank had the worst rates on some of their savings accounts, offering just 0.01% interest.

From December 2016, companies will have to remind consumers about changes to interest rates or the end of an introductory offer, as well as provide a quicker and easier switching process.

The Bank of England’s benchmark interest rate remains at 0.5%.

[1] Citywire Data reveals 0.1% cash savings rates Citywire.co.uk
[2] Financial Times Some UK savings accounts paying interest of just 0.01% – FCA next.ft.com