Savers Looking Online for Better Interest Rates

by Peter Wakeford
Posted by Hannah on 14 April 2009
New Savings Habits Revealed by Provider

Internet savings accounts have spiked in popularity among tech-savvy depositors.

Britons are increasingly getting wise to the higher-than-average savings rates that can be found in online accounts, according to one provider.

Halifax found that 64 percent of men and 49 percent of women prefer to manage their savings on the internet. Moreover, 70 percent of all 25 to 34-year-olds and 46 percent of "silver surfer" over-55s said the same.

Savings rates have been damaged over recent months by changes to the Bank of England's lending rate. Policymakers at the Bank have slashed the rate from five to just 0.5 percent - an all-time low.

This has had a knock-on effect on rates offered by UK deposit accounts, with even best-buy cash ISAs coming in at just over three percent. Last year, these best-buys topped out at over six percent.

The Halifax survey reflected these changes by showing that the single most popular reason for saving online was that it was "easy" to transfer money between accounts. Customer switching has become more important considering the comparatively low rates offered by many providers.

Around a third (34 percent) said that they used a price comparison website to look at other savings accounts. Halifax also found that nine percent of conscientious savers check their account online every day.

Flavia Palacios Umana, head of Halifax Savings products, said: "In a low interest rate environment it is encouraging to see that savers are making choices based on a variety of factors to ensure their savings account really does meet their requirements. Internet banking allows customers to access their money 24 hours a day whenever it suits them, making it easier for people to make the most of their savings."

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