Savers can earn over ten times the current Base Rate but huge numbers are still stuck in decrepit accounts paying paltry returns. In some cases, savers are earning no interest whatsoever.

This highlights the need to ditch your dinosaur account and switch to a top-payer (see the Top Savings, Top New ISAs and Regular Savings guides for the best rates).

A investigation has found more than a third of accounts pay less than 1% interest. Almost one in three of the total pay less than the current 0.5% Base Rate.

Meanwhile, just 3% of accounts pay 3% interest or above.

Banks and building societies have hacked into the interest earned on the vast majority of other accounts during the past year.

This is largely explained by the fact the official Base Rate has plummeted from its 5% level this time 12 months ago to the current historic low figure.

Yet on the few top accounts, savers have seen a rate resurrection over recent weeks.

You can now earn well over 3% variable and have easy access to your cash. If you're prepared to lock your money away for anything up to five years, you could earn almost 5.5% fixed. All savings rates quoted are before tax.

Rock-bottom rates

In total, there are 1,898 UK-based savings accounts at present, according to financial data website These include taxable accounts and tax-free cash ISAs. Of those:

  • 56 (3%) pay 3% or more. Some 10 of those are easy access accounts, while 46 are fixed rate or regular savings accounts paying 5% or above. A regular savings account is one where you must deposit a monthly sum.
  • 689 (36%) pay less than 1%
  • 533 (28%) pay less than 0.5%
  • 4 (0.3%) pay nothing. The hall of shame of 0% payers, according to Moneyfacts, includes the Bank of China 7-day Notice and 30-day Notice accounts, the Cater Allen Private Bank Sovereign 30 account (on sub-£25,000 balances) and the Laiki Bank Instant Access account.

Dan Plant, money analyst, says: "These figures show the need to switch your savings urgently if you're stuck in a poor-paying account.

"Act now, and it's possible to earn £100s more in interest per year."

Michelle Slade, from Moneyfacts, adds: "In the last few months, banks and building societies have been launching new savings accounts paying competitive rates to attract our money, but many still pay rates of 1% or less.

"Providers regularly launch new accounts paying increased rates, meaning existing customers receive lower rates."

If you are earning a paltry sum, the one consolation is that, for those with a variable rate mortgage, the cost of living has fallen over the past year, meaning your money is still beating inflation.

Yet that's still no reason to put up with your rate when you could be earning much more (see the Cost of living falling MSE News story).

Profit from switching – easy access

To highlight the benefit of moving your cash, take the example of a basic rate taxpayer who switches from a 0% account to the current top taxable deal: the Coventry Building Society 1st Class Postal account, at 3.3% (which includes a 1.3 percentage point bonus for a year).

Assuming the rate remains constant:

  • On a £5,000 balance, you would be roughly £132 a year better off after tax.
  • By moving £50,000, you would be approximately £1,320 a year in profit ...
  • ... moving from a 1% account to a 3.3% account would net you an additional £92 and £920, respectively, under the same scenarios (see the Top Savings guide for alternative accounts).

If you plump for a top-paying easy access account, in most cases, the rate will include a bonus, so it is likely to eventually plummet.

Profit from switching – fixed rates

A basic rate taxpayer moving the same amounts from a 0% payer to the top one-year fix, the West Bromwich Building Society 3.9% One-year Ebond, will:

  • Be roughly £156 a year better off after tax on a £5,000 balance.
  • Be approximately £1,560 a year in profit on a £50,000 deposit ...
  • ... moving from a 1% account to a 3.9% account would net you an additional £116 and £1,160, respectively, under the same scenarios (see the Top Fixed Rates guide for alternative accounts).

You could earn up to 4.4% on a two-year fix, 4.65% on a three-year fix or 5.45% on a five-year fix, meaning even greater potential gains.

However, you won't be able to access your cash for the term of the account, so consider that carefully before taking the fixed-rate plunge.

You also run the risk of alternative accounts eventually paying higher rates leaving you stuck on a lesser fixed deal.

Savers' Rights campaign

It is not that easy to compare savings rates given providers do not always display your current rate on statements. is running a campaign to force banks and building societies to publish savings rates on statements, which has been supported by politicians (see the MPs back MSE Savers' Rights campaign MSE News story).

While hundreds of accounts taken out months or years ago have seen the pay-rate plummet, even some of the better payers have cut the interest earned recently.

For example, Natwest last week cut its e-ISA rate from up to 3.51% on accounts opened before 15 May, with up to £30,000 deposited, by 0.25 percentage points, even though the Base Rate has not moved since March.

Ensure you save a maximum of £50,000 per person, per financial institution so your money is safe (full details in the Safe Savings guide).

Further Reading/Key Links

Safety guide: Are your savings safe?
Boost your rate: Top Savings, Regular Savings, Top Fixed Rates
ISA guides: Top New ISAs