Low Interest Rates Provide Poor Returns

Almost all checking accounts provide a rate for credit balances. With the Bank of England (BOE) base rate at 0.5% these returns are minimal.

But the returns are also low if you select one of the many instant access deposit accounts on the market as shown in the table below.

Of the mainstream banks, Santander and The Co-operative provide the highest rates but these are still below inflation or the Retail Price Index.

Provider
Checking
£100,000
Checking
£250,000
Deposit
£100,000
Deposit
£250,000
Barclays logo
0.10%
0.10%
0.38%
0.38%
Lloyds logo
0.00%
0.00%
0.05%
0.05%
Santander logo
0.25%
0.25%
0.75%
0.75%
HSBC logo
0.00%
0.00%
0.06%
0.06%
RBS logo
0.00%
0.00%
0.05%
0.05%
Co-operative logo
0.21%
0.28%
0.12%
0.15%

Notes:

Instant access rates by bank

Example calculations

Lloyds 0.05% on a balance of £25,000 provides a return of £12.50 per year. Compare this with 0.28% from the Co-operative which provides a return of £70.

What Are the Alternatives?

Instant access accounts have always generally provided low rates of interest. If you opt for a bond or longer term savings account then the rates begin to increase to more acceptable levels.

Fixed Rate Deposits

Provider
1 Month
3 months
6 months
12 months
Barclays logo
na%
na%
na%
na%
Lloyds logo
0.05%
0.05%
0.05%
0.05%
Santander logo
1.00%
1.00%
1.00%
1.40%
HSBC logo
0.06%
0.40%
0.45%
0.55%
RBS logo
0.15%
0.15%
0.75%
0.75%
Co-operative logo
0.34%
0.72%
0.87%
1.43%

Note: Data shown is for a deposit of £100,000 for the terms illustrated.

Long term deposit rates by bank