Wednesday, 25 July 2018

Financial Conduct Authority suggests 'basic savings rate' to boost returns



Banks could be forced to set a minimum interest rate on their savings accounts, the Financial Conduct Authority (FCA) has suggested.

 
The FCA said it was concerned that savers who stay with the same bank or building society for a long time get poor returns on their money.


Some banks currently pay just 0.05% a year on instant access accounts.


The Basic Savings Rate (BSR) would apply to all easy access cash ISA products, as well as savings accounts.


It would be applied after the account had been opened for a set period, for example one year.


"Providers can take advantage of high levels of customer inaction to pay lower interest rates to longstanding customers," said Christopher Woolard, executive director of strategy and competition at the FCA.


He said customers who do not shop around for higher rates should be treated fairly by their banks or building societies.


Citizens Advice said the average amount that savers were losing by not switching accounts was £48 a year.


The FCA suggested it would be up to each bank to set their own BSR, which would apply across all their instant access accounts. The rates would then be published on the FCA's website, so consumers could compare them easily.




BBC      News.