Savings account holders are being urged to remember to switch to better accounts when introductory special offers run out.
Moneysupermarket said that it’s common for savers to sign up for fixed bonds with high interest rates but to then forget to switch when the special rate period expires. Estimates suggest that through doing this, savers could be missing out on hundreds of pounds in interest, particularly as rates are currently competitive.
In September 2010, introductory rates of around three per cent were typically on offer but often for just one year. As the one-year period closes, rates are dropping to as low as 0.5 per cent and savers could get a better deal elsewhere.
One account was offering an introductory rate of 2.9 per cent last year but now the 12-month offer is up, the rate has dropped to just 0.1 per cent. With accounts now available with interest rates of up to 3.5 per cent, a saver would be missing out on up to £500 per year by not switching, based on a balance of £15,000.
Kevin Mountford, head of banking at MoneySupermarket, said, “Savers cannot always rely on their banks to remind them their product term has come to end. If you fail to respond to any maturity notification or fail to act, some providers will automatically enrol you into another bond, tying your savings up for the term of the product, or they will place your savings in an account paying a poor rate of interest.”
