Major high street banks are performing poorly when it comes to savings accounts, with some of the UK’s biggest names languishing at the bottom of a new Which? analysis.
HSBC, Barclays, and Bank of Scotland all received lacklustre customer scores of around 65 per cent, significantly below their digital and building society rivals.
HSBC’s interest rates were particularly disappointing, scoring just 39 per cent which the second-lowest in Which?’s analysis.
None of the UK’s biggest banks, except Nationwide, managed to secure a place in the top 20 providers.
The consumer champion’s survey of over 4,500 respondents revealed that digital banks and building societies are consistently outperforming traditional high street names in both customer satisfaction and interest rates.
Leading the rankings was app-based provider Moneybox, established in 2016, which achieved an impressive customer score of 83 per cent and received five stars for its banking app.
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Major banks are “lagging behind” digital competitors when it comes to savings interest rates
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Digital bank Zopa demonstrated exceptional performance in interest rates, scoring 92 per cent, having expanded from peer-to-peer lending to banking in 2020.
Marcus by Goldman Sachs and Yorkshire Building Society were also named Which? Recommended Providers, with customer scores of 79 per cent and 77 per cent respectively.
Kent Reliance and Leeds Building Society showed strong performance in interest rates, both scoring 91 per cent, though they missed out on recommended status due to lower customer satisfaction scores.
The analysis covered 37 providers, with all being protected by the Financial Services Compensation Scheme.
Top-rated providers offered significantly higher rates on instant savings accounts, with Yorkshire Building Society at 4.91 per cent, Marcus by Goldman Sachs at 4.45 per cent, and Zopa at 4.44 per cent.
In contrast, traditional high street banks offered substantially lower rates, with HSBC at two per cent, Bank of Scotland at 1.8 per cent, and Barclays trailing at just 1.6 per cent.
However, Which? warns that focusing solely on high interest rates may not be the best strategy.
Some providers, including Bank of London & The Middle East and Cahoot, scored well on rates but performed poorly in customer satisfaction surveys.
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Savings interest rates are being cut following recent actions from the Bank of England GETTY Sam Richardson, Deputy Editor of Which? Money, said: “High street banks continue to lag behind digital banks and building societies – not just on the competitiveness of interest rates offered but also how happy their customers are.”
“Some of the top-performing providers in our analysis may not be familiar to consumers, but they have been rigorously analysed and all are backed by the Financial Services Compensation Scheme,” he added.
With the Bank of England’s recent decision to reduce interest rates, savers with instant-access accounts may see their rates cut.
Richardson advises that “loyalty is seldom rewarded and, if you’re with a high street name, now could be the time to move your money.”
GB News has contacted HSBC, Barclays and Bank of Scotland for comment.