THOUSANDS of bank customers could risk missing out on cash unless they make a quick phone call.
Customers banking with Sainsbury's Bank could be losing out on extra savings boosts, despite it hiking its interest rates.
The account provider is said to not be boosting rates on its Variable Rate Cash ISA unless the customer actually asks, reports This is Money.
This particular account is said to have an interest rate of 2.85% when balances are over £500 currently.
But the terms and conditions for Sainsbury's variable rate ISA state: "We may offer different interest rates for new accounts.
"The interest rate on your account won't automatically change to match the new rates."
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This means that unless you ask for an increase, you won't get it.
One customer told This Is Money that his variable rate ISA was still earning 0.7% interest.
He phoned Sainsbury's Bank and was told the amount has not gone up since rates began being boosted last July.
Following the phone call the bank upped the rate to the advertised 2.85%.
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Over a year, if £20,000 was paid into the ISA (which is the maximum amount you can pay) then the difference between a 0.7% rate and a 2.85% rate is £430.
The bank confirmed to This Is Money that cash ISA customers have to contact it either on the phone or via secure message online to have the interest boosted on their accounts.
A Sainsbury’s Bank spokesperson told The Sun: “We're very transparent about all of our rates online and can apply new rates on request."
The bank also said if it makes any changes to interest rates, it contacts affected customers to let them know and publishes any changes, including new rates, on its website
If you have the same cash ISA either with Sainsbury's or with a similar bank then it's important to check the small print.
Make sure to phone the bank if you think you're not getting the best rate and you could also get a boost.
It's not the first time banking customers have had to ask Sainsbury's for a boost in rates, despite the account being variable.
Last year, one customer told This Is Money that his variable rate ISA was still earning 0.35% interest despite it offering 1.22% interest.
It comes as the Bank of England has hiked its base rate 10 times in a row.
The rate was hiked from 3.5% to 4% in February in a bid to tackle high inflation.
A base rate rise generally sees banks pass on higher rates to savers – though they are usually much slower to act than with passing on higher rates for borrowing.
Today, the Treasury Committee has written to Barclays, HSBC UK, Lloyds Banking Group and NatWest Group to explain why some of their savings rates are still significantly lower than the Bank of England base rate.
We've rounded up the savings accounts that are paying the lowest amounts and explained where you can get the most for your cash.
How can I find the best savings rates?
With your current rates in mind, don't waste time looking at individual banking sites to compare rates – it'll take you an eternity.
Research websites like MoneyFacts and price comparison websites such as Compare the Market, Go Compare and MoneySupermarket will help save you time and show you the best rates available.
These sites let you tailor your searches to an account type that suits you.
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There are five main types of savings accounts, and understanding the differences can help you narrow down the options.
- Easy-access savings accounts – usually allow unlimited cash withdrawals. However, this perk means they tend to come with lower interest returns.
- Regular savings accounts – generate decent returns but only on the basis that you pay in a set amount each month.
- Notice accounts – offer slightly higher rates than easy-access accounts but you'll need to give advance notice to your bank (up to 95 days) before you can make a withdrawal or you'll forfeit the interest.
- Fixed rate bonds – these offer some of the highest interest rates. However, if interest rates increase during your term you can't move your money and switch to a better account.
- Individual savings accounts (ISAs) – these can pay high interest but come with high withdrawal fees. But, Lifetime Isas are great for anyone aged 18-39 hoping to buy a house or save for retirement.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
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