The banks show no loyalty to their long-standing customers. Now they are finding that disloyalty cuts both ways. Disgruntled savers are voting with their feet in protest at the latest wave of branch closures by switching their deposits.
In most cases they’re getting a better return, too, as the big high street banks rarely feature in the best buy savings rate tables. Instead, they have come under repeated attack for their rip-off savings rates.
At the same time, they are closing ever more branches in a bid to boost margins, despite already making billions of profits every year.
In 2022, starting 425 branches were shuttered. That rose to an even more shocking 633 last year, new research from Investec Bank shows.
Banks have already confirmed another 245 closures this year, and the numbers are likely to rise even higher as banks slash their networks to save money.
Consumer champion Which? has previously warned customers against switching to a bank purely because it continues to offer local branch access as there is no guarantee this will continue in future.
In practice, savers are doing the opposite, with around 6.6 million closing at least one branch-based savings account in the past two years.
More than a million expect to follow suit within 12 months.
Among those who switched, almost two thirds moved their money into digitally-managed savings accounts. And it serves the big banks right.
Investec’s research also shows that of the top 50 two-year fixed rate savings accounts just 14 are branch-based, down from 20 in 2018, as online options dominate the savings tables.
As bank and building societies close branches, more people have been closing linked savings accounts and opening online ones instead, said David Hunt, head of retail savings at Investec. “Many of the best-buy accounts are online-only, so switching from branch-based accounts could see you receive a better rate of interest on your savings.”
Lucinda O’Brien, savings expert at Money.co.uk, said that savers willing to go online can now get a 5.21 percent from SmartSave’s best buy fixed-rate one year savings bond, which pays 5.21 percent. “The only downside is that savers need a minimum deposit of £10,000 to access this account.”
Investec pays 5.15 percent for one year on a minimum £5,000, while Aldermore pays 5.11 percent on £1,000 and above.
Hampshire Trust Bank pays a fixed rate of 4.54 percent a year for five years, while Isbank pays 4.50 percent over the same term, only available through savings platform Raisin UK.
READ MORE: Last chance to get 5% on cash Isa as savings rates could fall next month
As this year’s Isa season draws to a close, Kent Reliance pays a market-leading fixed rate of 5.07 percent for one year on £1,000 or more in its cash Isa, while Aldermore pays 5.05 percent.
Over five years, United Trust Bank pays 4.05 percent, with Paragon paying four percent.
With the Bank of England expected to start cutting interest rates from May or June, now may be a good time to lock into a longer term fixed rate, but only if you are certain you will not need access to your money in that time.
For those who do want branch access, local building societies may be the best option with Furness, Mansfield, Melton, Nottingham, Principality and the West Bromwich all offering competitive cash Isa rates with branch access.
If your local branch has shut, take your revenge by moving your business elsewhere. You’ll probably get a much better return on your money. Who needs the big, greedy banks anyway?
