Despite the credit crunch and the fact that many financial institutions have been forced to write off billions in bad debts, the big five high street banks still saw their combined profits rise last year.Yet many consumers are being penalised with uncompetitive rates.
The total profits of the big five high street banks – Barclays, Halifax Bank of Scotland (HBOS), HSBC, Lloyds TSB and Royal Bank of Scotland (RBS) – rose again last year to a record £38.6billion, despite the fact they were forced to write off billions of pounds in bad debts.
Compare over 4,000 savings accounts including ISAs and offshore accounts.But this success is coming at a cost: banks are seeking to widen profit margins on many retail products at the expense of customers. Consumers therefore need to be on their toes and move their money elsewhere if they are not getting a competitive deal.
The Bank of England voted to keep interest rates on hold at 5.25% this month, but the impact of last month’s rate cut is still filtering through and savers seem to be bearing the brunt of the banks’ margin-widening process.
Many of the big-name institutions have slashed rates by more than February’s quarter-point Bank rate reduction. Barclays has cut its savings rates by an average of 0.39 percentage points that is in addition to cuts it imposed on some accounts in January.
Halifax’s Websaver and Egg’s internet savings accounts have pulled in huge sums of money over recent years because they constistently rewarded customers with a competitive rate of interest. However, they are now looking much less attractive with Egg slashing its rate by 0.5% and Halifax’s Websaver (without cashcard) dropping by 0.4%.
Compare over 4,000 savings accounts including ISAs and offshore accounts.
