Savers will be given easy-to-understand information to help them compare cash savings accounts and easy access cash ISAs under new rules launched today, which will also ensure customers are informed of changes to interest rates.
The Financial Conduct Authority's (FCA's) new regulations will force firms to display key info such as interest rates and account names in a summary box so savers can compare various rates on offer across the market.
The FCA's rules will also mean that companies must clearly remind consumers about changes in interest rates or the end of an introductory rate and they'll be required to provide a quicker and easier switching process.
The financial watchdog says it'll be left up to individual firms to decide how they alert customers of rate changes and expiring introductory rates, but it's understood customers will be alerted in the way in which they initially asked to be contacted by their bank (eg, some may be alerted by post, others may be alerted by text).
In a world of rock-bottom rates, check out our Top Savings Account guide for info on how to make the most out of your money.
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Banks commit to seven-day ISA transfers
The British Bankers' Association, the Building Societies Association and Tax Incentivised Savings Association have agreed that from next year, a minimum of 80% of cash ISA transfers will be carried out within seven working days. They have also committed to carrying out a study on improving this further.
The industry will publish details of its performance against the target quarterly, starting in April 2017.
Meanwhile, the FCA which previously noted that about 66% of all transfers were being completed within seven days says it will consider introducing further regulations to improve switching within the savings market.
FCA data shines light on low-level savings rates
The regulator has also today published its third and final batch of its 'sunlight remedy' data, which shows the lowest interest rates available from 32 providers of cash savings accounts and easy access cash ISAs.
This is part of the FCA's work to 'shine a light' on firms' strategies towards long-standing customers it is hoped that this will help ensure customers get better rates on their savings.
While the sunlight data deliberately focuses on the lowest possible rate that might be earned by a consumer, and does not represent what every customer is earning, it nevertheless goes to show that some consumers could be better off by opening a different account.
The data shows that:
- In all accounts, generally speaking, those closed to new customers pay worse rates of interest than those open to new customers.
- Broadly, you're more likely to get a worse savings rate in an account managed in branch than those online.
New rules will help savers 'get the facts they need' to decide where to put their cash
Christopher Woolard, executive director of strategy and competition at the FCA, says: "The new rules coming into force today will help consumers get the facts they need to make an informed decision about what to do with their savings.
"In a well-functioning market, providers should be competing to offer the best possible deal to consumers. Our sunlight remedy data shows that some consumers could be better off by opening a different account. One of our regulatory priorities is the treatment of long-standing customers and we want to see all customers benefit from competition and innovation in financial markets."