Britons who have stayed loyal with a particular bank for a long time have been urged to look around to make sure they are getting the best deal.
Many economists are predicting interest rates will further increase and hit seven percent by the end of the year.
Alexandra Loydon, director of Partner Engagement and Consultancy at St. James’s Place, told Express.co.uk: “Shop around, understand what’s out there and if other institutions are offering better rates then it’s worth considering and/or engaging with your own bank to ensure you’re in the best account.
“Also make sure you understand the difference between current and savings accounts; savings accounts should be paying you a much higher rate of interest than your current account.”
But she warned it can be quite difficult to switch bank accounts and banks rely on this to retain their customers.
She explained: “If you’re in the position of not being particularly proficient using the internet and operating online, it becomes an almost impossible task.
“And it’s these things the banks are relying on; people don’t leave because it’s hard and many can’t be bothered, so there’s no incentive for banks to increase rates.”
She warned millions of savers have their cash in low-paying accounts with rates of two percent or less, when some fixed rate savers offer six percent or more.
A person with £10,000 in savings earning two percent could miss out on some £400 a year in interest.
Rajan Lakhani, resident money expert at smart money app Plum, said there are some “very good deals” out there for savers if they are willing to move away from the traditional big name providers.
He said: “Don’t depend on your high street bank to deliver you an interest rate anywhere near the base rate on your savings.
“While the FCA has been encouraging them to increase their rates, increases have been both slow and small, most still below the two percent mark for easy access accounts. Meanwhile, fintechs and smaller banks have been able to pass on high rates quickly to savers.”
Plum currently offers up to 4.21 percent AER with its Easy Access Interest Pocket, while even its Basic interest account offers a rate of 3.51 percent.
But Mr Lakhani warned savers often struggle to find the motivation to put the time into shopping around for a better deal.
He said: “Inertia is a massive issue, and something the high street banks take advantage of by only offering low rates in the knowledge that most people won’t switch.
“It can be helpful to do the sums and see exactly how much extra you would save elsewhere to start with.
“You can also look at switching methodically to motivate yourself, perhaps once a year or every six months while the base rate is frequently changing.”
He also spoke to the concern that a person may have to switch again if providers boost their rates again, in the event of another base interest rate increase.
The expert said: “An important thing to remember however is that your savings aren’t doing much as long as they are sitting in your current account. Waiting for the top rate isn’t a wise game, as it’s impossible to predict when this will be.”
Ms Loydon spoke about some of the factors people should consider when looking at different savings options.
She said: “Savings accounts may have different access terms, so you need to think about when you might need your money and how long can you save it for.
“Some people might like a high street presence and not want to transact everything online, although this is becoming increasingly difficult.
“Others might need access to different currencies and overseas account facilities. Lending might also need to be factored into.
“If you’re looking for a mortgage for example you might want an offset account whereby you use a savings account to offset what you owe.”
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