For better or for worse, I’m not tech-savvy and prefer to conduct my banking business in a branch with a human being rather than with a call centre or via a smartphone app.
Given interest rates have risen, I want to move my savings to a better rate. How do I find the best branch-operated savings account? M.O., Huddersfield, West Yorkshire
Ruth Jackson-Kirby replies: The good news is that savings rates have been steadily rising all year thanks to repeated increases in the Bank of England base rate. The top-paying instant access savings account now pays 1.9 per cent.
Savvy saver: Nearly all of the best-buy rates are reserved for online-only or smartphone-based accounts
But many of us still have money languishing in savings accounts paying as little as 0.1 per cent. So, you are right to be looking for a new home for your savings.
Unfortunately, nearly all of the best-buy rates are reserved for online-only or smartphone-based accounts. Part of the reason for this is that these accounts are less costly for banks and building societies to administer – for example, there is no need to pay a staff member to be behind a branch counter.
The other reason why some of the best rates need you to be internet-savvy is because they are being offered by challenger banks that simply don’t have a high street presence. Many of the new banks, such as Starling, Atom and Chase, require you to have a smartphone app.
This has created a discrepancy between the rates available to tech-savvy savers and those on offer to savers – like you – who prefer to manage their account via a branch, phone or by post.
For example, of the top 20 one-year savings bonds, only one is available offline, according to research by rate scrutineer Savings Champion. Similarly, of the top 20 easy-access accounts, only five provide savers with an option other than the internet or a mobile app.
‘It’s tough for traditional savers,’ says Anna Bowes, co-founder of Savings Champion. ‘They are missing out on the best rates available as more banks take the online-only approach. Even old favourites such as NS&I now offer online-only accounts.’
This all means you are going to get a lower interest rate if you can’t open an online account. For example, if you are looking for an instantaccess savings account, the best rate is 1.9 per cent from Al Rayan Bank, but it must be opened online.
If you are prepared to open and operate your account over the phone you could get 1.86 per cent from Shawbrook Bank.
But for branch access, the best rate drops to 1.6 per cent from Monmouthshire Building Society on sums of £25,000 or more in its Escalator Instant account – but they don’t have a branch near Huddersfield (its 22 branches and agencies are primarily based in Wales).
Rachel Springall, finance expert at rate scrutineer Moneyfacts, says: ‘If someone does not have online access, it would be wise if they ask their family or friends about getting them online so they can apply for the top rates.’
A friend or relative could help you apply for an online account as many of these can then be managed over the phone or by post once they are up and running. For example, if someone could help you open the account online, you could get the best-buy instant access account from Al Rayan Bank at 1.9 per cent. You could then manage the account by telephone or post.
Similarly, Tandem Bank’s one-year fixed-rate savings bond pays 3.3 per cent interest and can be operated by telephone once you’ve opened the account online. If you can’t get help opening an account, don’t despair. There are several accounts that can be opened in other ways and still offer decent interest rates.
Bowes says: ‘The compromise in returns from using a postal account is often not as stark as some fear – especially if you avoid using the high street banks. There are some providers who still offer postal, branch or telephone account opening options. That said, they could be providers you are not familiar with.’
For example, if you are looking for a cash Isa, UBL UK offers the best rates across the board. All its accounts can be opened in a branch, by post or online. You can get a rate of 2.51 per cent for a one-year fixed-rate cash Isa, rising to 3.1 per cent for a five-year deal.
Bowes adds: ‘Savers may need to take a well-informed leap of faith. But as long as their chosen provider is part of the Financial Services Compensation Scheme or European equivalent, there is no reason not to consider trying out an unfamiliar name.’ The FSCS safeguards savings up to £85,000 if a firm fails.
The best non-Isa accounts with postal and in-branch opening options are offered by building societies. For example, Buckinghamshire offers a fixed-rate, one-year savings bond paying 3 per cent interest.
It also offers a three-year bond that can be managed in branch or by post, which at 3.35 per cent fixed is just behind the best buys.
Mansfield has a postal savings 90- day notice account with an interest rate of 2.25 per cent.
