Bank warns of disparity in savings rates

A bank has warned of a "huge disparity" in interest rates paid on different savings accounts on the market.

Sainsbury's Bank said that while the savings market is highly competitive, there are still many accounts paying poor rates.

More than a third of savings accounts are paying derisory interest rates, it claimed, with 14 per cent offering interest rates between one and two per cent and 21 per cent paying rates between two and three per cent.

Its research found that only a fifth of savings accounts are offering rates of five per cent or more.

Head of savings at Sainsbury's Bank Peter Wood said consumers must ensure they shop around to get the most competitive rates for their savings plan.

He stated: "Our research also indicates that over a third of accounts are paying less than three per cent interest. These rates are far from competitive and we would urge savers to keep a close eye on their savings interest rates and be prepared to switch from accounts that are not paying consistently attractive returns."

Investec Private Bank warned earlier this week that savers should look for consistency in savings accounts, rather than those that offer short-term incentives.