6bn lost on savings

New research has revealed over half of savers have no idea what interest rate their savings account is earning, costing an estimated 6 billion.

09:28 15 July 2004

New research has revealed over half of savers have no idea what interest rate their savings account is earning, costing an estimated 6 billion.

Yet the same survey found that consumers view getting a high interest rate as a top factor in their choice of account provider.

More than two-thirds also say they would move their account if they thought they were getting a poor deal.

"Most consumers would have a real shock if they took the trouble to check their savings account," says Lloyd East, director of AA personal finance. "Up to 6 billion per year is being lost because of poor interest rates."

He continued: "85 per cent of savers could be losing out simply because they stay with their high street provider, with money in accounts that have such poor rates they would be no worse off putting their cash in a biscuit tin under the bed!"

The AA has responded by entering the savings market with a new Telephone Savings Account, offering a 5.11 per cent gross/AER immediate access.

The AA Telephone Savings Account rate includes a guaranteed 12-month introductory bonus and can be opened with a minimum of 500.

Mr East believes the convenience and flexibility of the new AA account are two reasons why consumers will be tempted to opt for the service.

He concluded by saying: "The AA offers the best of both worlds - a risk-free easy access savings account from a reliable provider, coupled with a top-performing interest rate."