A MAJOR bank is slashing its top paying savings rate in a blow to customers squirreling away cash.
Santander is cutting the rate on its easy access account from Monday 20 May.
The account has been paying a juicy 5.2% but the new rate will be significantly less at 4.2%.
Now customers have just days to move cash to a better paying account before their returns start to fall.
The account was only launched in September with a 12-month term.
But in March Santander started contacting customers to let them know the rate would fall.
Aside from the rate, other terms of the account, remain the same and customers can continue to access their money at any time with no charges.
Savers are now being urged to not miss out and shift their cash.
There are 77 easy access acounts that pay more than Santander’s 4.2%, according to Moneyfactscompare.co.uk.
Rachel Springall from comparison site moneyfactscompare.co.uk said: “Savers might not want the hassle of switching, but it’s really quick and easy to do online, plus they can find some of the leading easy access accounts are paying around 5%…
“At the time of its launch, Santander’s offer caused a stir, but it’s now time for savers to check and see if the account will be the right choice for them.
“Savers will need to check the terms and conditions of other accounts carefully before they move their cash.”
Easy access accounts usually allow users to tap into cash without penalty but Rachel warned some do restrict withdrawals.
Rachel added: “Paragon Bank pays a competitive 5.05%, but it only permits two withdrawals within 12 months, so careful planning is a must.”
The rate cut comes amid expectations that the Bank of England will reduce the base rate later this year.
Lower central interest rates are likely to fees through to the savings market.
Rachel warned there could be a sharp drop in the rates offered on easy access accounts as well as products pulled from the market.
She added: “Savers need to keep a close eye on the top rate tables and switch quicky to not be left disappointed.”
A Santander spokesperson said: “Santander regularly reviews product rates to ensure that we continue to help our customers make the most of their money in a way that is sustainable in the changeable wider market conditions.
“Our Easy Access Saver Limited Edition (Issue 3) customers will continue to benefit from our best easy access rate of 4.20%.”
There are currently 77 easy access accounts that pay above 4.20% meaning Santander customers can easily get more returns on their cash.
In fact, you can match the 5.2% rate previously offered by Santander with Ulster Bank’s loyalty saver. However, you will need to have cash worth at least £5,000 in the account to get the top rate, if you have less you’ll earn 2.25%.
Paragon Bank is the nest best payer, according to Moneyfactscompare.co.uk, offering 5.05%. However, access to cash is a little restricted so check the details carefully to decide if it’s the right account for your circumstances.
Close Brothers Savings easy access account offers 5% but you’ll need a chunky pot of £10,000 to qualify otherwise cash will earn 1%.
Hanley Economic building society also pays 5% but you will need to have been a member of the society for five years and also deposit at least £5,000.
And Kent Reliance pays 4.86% on balances of at least £1,000.
Many savings accounts offer miserly rates meaning that money is generating little or no return.
However, there are ways to get your cash working hard. Lana Clements explains how to make sure you money is getting the best interest rate.
Easy access savings accounts offer flexibility for customers, meaning they can dip in and out of cash when needed. However, the caveat is that rates can change at any time.
If you’re keeping your money in an easy access account, you’ll need to keep checking whether it’s the best paying account for your circumstances and move if not.
Check in at least once a month to see what is happening in the market.
Check what is offered by your bank – sometimes the best rates are for customers only.
But do search the wider market as often top savings accounts are offered by lesser known providers.
Comparison sites are a good place to check for the top rates. Try Moneyfactscompare.co.uk or Moneysupermarket.
You can search by different account type. You’ll usually get a better interest rate if you can lock your money away for a fixed amount of time, but it’s always a good idea to keep some money in an easy access account in case of emergencies.
Don’t overlook regular savings accounts often pay some of the best rates, but you’ll need to commit to monthly payments. This can be a great way to get into a savings habit while earning top rates at the same time.
