MPs call on City regulator to launch a crackdown on rip-off instant access savings rates
MPs have pressed the City regulator to clamp down on rip-off savings rates after banks revealed billions of pounds were held in low-return instant access accounts.
Savers are being paid as little as 0.55 per cent on deposits despite a steep rise in the Bank of England interest rate.
Bank bosses were accused last month of being ‘ungenerous’ with customers by the Commons Treasury committee, which has now written to the Financial Conduct Authority (FCA) to ask what it is doing to ensure the savings market is competitive.
Rip-off rates: Savers are being paid as little as 0.55% on deposits despite a steep rise in the Bank of England interest rate
Instant access account rates range from 0.55 per cent to 1.2 per cent, compared to a Bank rate of 4 per cent, MPs found.
Banks argue lower interest accounts are mainly used by customers with fewer savings.
But evidence showed that at Lloyds and NatWest a fifth of such accounts hold more than £5,000. Lloyds had around £120billion in instant access deposits as of December.
NatWest had £92.5billion, with 2.8million accounts of more than £5,000.
An FCA spokesman said: ‘We welcome the committee’s interest in this area and we’ll reply in due course.’
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