 has told providers to contact all their savings customers by September 30 or face paying a fine. It means savers who haven't moved accounts recently could be in line to get a big hike in their interest rate. Higher savings rates mean your provider must pay you more interest. If you have £1,000 in your account and it's paying 0.1% interest, at the end of the year you'd earn £1. But by moving to the best buy easy access savings rate, currently from Secure Trust at 4.55%, you'd get £45.50 interest after a year. Another rule change announced today will also force banks and building societies to pass on higher interest rates to savers quicker. The Bank of England base rate is currently 5%, following a string of increases, and there are expectations that it could rise again on Thursday. However, there have been concerns that providers have been raising borrowing costs at a much faster pace than savings rates have increased. According to figures released by Moneyfactscompare.co.uk on Monday, the average two-year fixed homeowner mortgage rate on the market is 6.81%, while the average easy access savings rate is 2.78% and the typical one-year fixed savings account has a rate of 5.19%. The FCA's plan follows a review of the cash savings market and a meeting held with banks in early July. While interest rates on savings accounts have been rising, th){kind=link}
A MAJOR rule change means banks and building societies have just weeks to tell customers their savings are earning next to no interest.
More than £250billion is currently sitting in savings accounts which earn no interest, Bank of England data shows.
Until now, providers haven’t had to contact customers to tell them they could be earning a lot more just by moving their cash to a better savings rate.
But today the Financial Conduct Authority (FCA) has told providers to contact all their savings customers by September 30 or face paying a fine.
It means savers who haven’t moved accounts recently could be in line to get a big hike in their interest rate.