Abacus Daily Debt News

Online savings accounts ‘have higher rates’

Banks and building societies are providing higher rates of interest on their online-based accounts, according to one comparison website.

Head of Moneyfacts.co.uk Louis Kaszczak suggested this could be because one-third of potential savers want "easy access accounts".

He said: "Online-based accounts are cheaper and easier to run for providers and this saving can be passed on through higher rates. The average rate is nearly twice as high."

Accounts set up online had average rates of 0.95 per cent, compared to 0.5 per cent provided in branches, Mr Kaszczak added.

His comments follow a statement by three lenders that their available rates for online accounts are expected to go up. This may be due to smaller providers finding it difficult to attract customers in an increasingly competitive fixed-rate bond market.

Barnsley Building Society, Principality Building Society and Intelligent Finance all announced a rise.

Moneyfacts.co.uk recently revealed that instant access accounts are consumers’ most popular method of saving, with fixed-rate bonds coming second.

By Francis Finch