A warning has been issued as nearly £400billion is currently sitting in bank accounts earning only 1% of interest or less.
Roughly £380.9 billion is thought to be sitting in current accounts and immediate access non-Isa savings accounts earning anywhere from 0% to 1%, according to analysis from Yorkshire Building Society and data consultant CACI.
Additionally, the study found that around 13 million UK citizens have current accounts with balances greater than £5,001. This implies that millions of Britons might be losing out on interest income worth hundreds of pounds.
The base rate now set by the Bank of England, which is 5.25%, ought to have caused interest rates on bank savings and banking products to rise.
Banks were first hesitant to pass on the higher rates, but they started to step up their game after receiving a warning from the Financial Conduct Authority (FCA) and Members of Parliament.
In a 2,000-person survey conducted by Yorkshire Building Society, it was shown that over half (55%) of savers had not recently compared the interest rates provided on their accounts.
Additionally, nearly half (49%) of those polled admitted to having used their money within the previous year.
£4,000 was the average amount that respondents felt they should have immediate access to.
Separate figures from the financial data company Moneyfactscompare.co.uk show that on Wednesday this week, the average easy access savings rate on the market was 3.16% while the average one-year fixed savings rate sat 4.76%.
The Money Saving Expert (MSE) website, run by Martin Lewis, has revealed the precise rate that you need to receive on your savings and advised that you “shouldn’t accept any less.”
Martin’s team encouraged savers to ensure they are receiving at least 5.2% interest on their savings.
The best easy-access rate at the time of writing is 5.22% from Metro Bank, and the best-paying fixed rate account is from Investec, which pays 5.3% fixed for one year.
If you’re able to give notice on when you want to withdraw your savings, Monument Bank pays 5.41% but you need to let them know 60 days before you want to make a withdrawal.
Regular saving accounts pay even more than this – but you’re normally limited to how much money you can save each month. Nationwide has launched a linked saver which pays 8% fixed for one year – but you can only deposit up to £200 each month.