Belfast Telegraph

Ulster Bank and Danske Bank ranked among the meanest banks in the UK

By Claire McNeilly

Ulster Bank and Danske Bank have been officially ranked among the meanest banks in the UK, paying savers as little as 10p interest per year on savings of £1,000.

That's according to new data from the Financial Conduct Authority (FCA) as part of its 'Sunlight' project which is aimed at naming and shaming institutions into treating long-standing customers better.

The main City regulator discovered that out of 32 institutions offering instant access savings accounts through branches, Ulster Bank and Danske were the joint-worst - paying an interest rate of 0.01% to savers.

This figure - which amounts to 10p a year on a £1,000 balance - was one-tenth of the median award and 1/65th of the interest paid by the highest-yielding equivalent account from Metro Bank (0.65%).

Other banks pulled up for the worst deals on the same easy access accounts that are no longer offered to new customers were HSBC (at 0.05%), First Trust (0.05%) and Co-op Bank (0.06%).

The FCA said it was publishing the information "to raise awareness of firms' strategies towards their long-standing consumers, and to allow a comparison between open and closed accounts".

The publication, which shows the lowest interest rates available from 32 providers of cash savings accounts and easy access ISAs, comes as regulators express increasing concern over how some banks operate.

Many institutions apply "bait and trap" tactics which attract savers with a good headline rate, only to allow the rewards to fall away as time goes by.

According to the FCA, the most loyal customers get treated the worst and competition does not prevail.

It has also emerged that customers are not kept properly informed of the rates they are receiving and are put off changing providers because of the perceived hassle and expectation that gains will be small.

Price comparison websites do not indicate how savers will be treated in the long run because they rank and advertise only savings products that are available to new customers and sometimes favour banks paying them most commission.

The financial watchdog said that new rules that came in to force earlier this week will compel savings institutions to provide customers with easy to understand information in a summary box and to remind them when favourable introductory rates expire.

TSB and Marks & Spencer, which is part of HSBC, were highlighted as being the least generous for instant access cash ISAs offered through branches. The FCA tables were based on interest rates on October 1.

HSBC said it looked bad in some cases because FCA methodology required it to volunteer the minimum interest paid, even if this was triggered by withdrawal.

Danske Bank said: "We would always encourage customers to talk to us to see if their savings could be working harder for them."

Belfast Telegraph