When was the last time you checked your savings account interest rates?

I’ve had an instant access online savings account for a very long time. Not the same account, you understand. The better than the rest interest rate that first attracts you doesn’t stay that way for long. So I swap this account for the latest offering once a year.
interest rate visualIn fact, most savings accounts seem to come with some form of added bonus in the first 12 months. It pays to keep an eye on when that first year is up.

But wait, I hear you say, surely my bank or building let me know about such an interest rate change? Yeah. Right.

Take my example. My instant access savings account is with, let’s call them Boyds Bank. The 12 month bonus rate came to an end on January 24 this year. My bank diligently told me this was going to happen in a letter – sent in early November last year.
I phoned them at that stage and asked what I could do. Could I for example, flag the fact that I wanted to move accounts on January 24. ‘No’. Could they tell me what my options might be at that stage in January? ‘No’, they said, ‘it was too early to know what accounts might be available in late January that I could switch into’.

If I was a more cynical person I might assume that a letter in November was a calculated attempt to keep me in a poorly paying account for some time after the 12 month anniversary. After all, it would be easy to forget the date if no further reminder were sent. But I choose to assume that Boyds would never be so cunning.

But I can see how less scrupulous savings institutions might profit from forgetful customers in older accounts with poorly paying interest rates. And interest rates are generally rubbish at the moment to so you have to be on top of your game to find a slightly better paying one.
In true Money Fight Club style I made a note in my diary to move the account as soon as the 12 months was up. This particularly savings account needs to link to my bank account, so I can use the two in tandem. I keep the barest minimum of money in my current account.
So, on the 25th of january I went online to check was accounts I could choose from. There were 3:

  • one paying 0.75% APR but requiring a balance of £10,000 – this also included a 0.55% 12 month introductory bonus
  • one that could be opened with just £1 paying 0.50% and including a 30% 12 month introductory bonus
  • and one paying 2% ‘for the first 12 months’ into which I had to pay between £25 and £250 a month. That seemed like a goer.

But the devil, as they say, is in the detail (detail that also seemed to trip up the member of staff I spoke to about the account).
Firstly, you had to pay the money by Standing Order, not as simple as a transfer between accounts. And while you can alter a Standing Order up or down (depending on how much you had available to save in a given month), the question is would you? The second issue was that you couldn’t transfer any existing savings into the account, other than by dripping it in using the Standing order technique. This second point was certainly not made clear and not pointed out by the member of staff I spoke to.
I’d never recommend that anybody keep serious savings in an account like this but it is possible you might have more than £250 ready to move, particularly if it was sitting in an account now paying 0.20% because the 12 month introductory bonus rate had ended.
I actually opened the savings account paying 2% and then found I couldn’t move funds into it. I then opened the one paying 0.50%. I’ll close the useless one down. But I do despair at how a very simple process seems to be dogged with complications and pernickety fine print.

Oh, and I’ve also made a note in my diary to look for alternatives when the bonus rate on the one I’ve chosen expires next year. I’d rather not rely on the letter being sent – too early or not. No offence Boyds.