Thousands of bank customers need to make a phone call NOW or risk losing cash | The Sun
THOUSANDS of savers at Sainsbury's Bank could be losing out on extra cash – despite the fact it's hiked its savings rates.
The issue is causing confusion for customers who have a savings account with the bank but have not benefited from a recent increase in the interest rates it pays to savers.
Sainsbury's Bank now offers 1.22% interest on its variable rate cash Isa when balances are over £500.
But, unusually, the increase has not been given to all customers automatically.
One customer told ThisIsMoney that his variable rate ISA was still earning 0.35% interest.
After calling Sainsbury's, he claims he was told he needed to contact the bank to get the new rate.
Interest rates have increased in recent months and the Bank of England hiked the base rate to 1.25% last month.
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That has prompted some banks to edge up the interest rates they pay to savers – including Sainsbury's.
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."
Sainsbury's Bank is reported to have said it was reviewing the interest rates set by the Bank of England and what it means for existing customers.
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It added: "If we make any changes to our interest rates, we'll contact our customers to let them know and publish any changes on our website and mobile app.
"Any changes to existing rates are done automatically and in line with our terms and conditions, which are available on our website."
Sainsbury's Bank said existing customers can get in touch to switch to the new rates.
Jenny Ross, money editor at Which? said it's "disappointing" and "unacceptable" that Sainsbury's bank isn't communicating its rates more clearly.
She said: "Some customers are experiencing long waiting times just to get through on the only method of contact they've been given.
"To help more savers benefit from this new rate, Sainsbury's should be making the sign up process much easier by giving customers more options to access it."
It comes after Marcus bank introduced a similar policy for interest rates on its savings accounts.
What are the best savings and bank accounts to boost your cash?
Isas
Savings accounts and cash Isas pay you a set amount of interest on your money.
Individual Savings Accounts (Isas) are a tax-free type of savings account, meaning you don’t pay tax on any interest you earn.
Each year you can stash up to £20,000 into an Isa – and this allowance resets with each new tax year on April 6.
There are a number of different types – including the Lifetime Isa, which is good for those saving to buy a first property, and a Stocks & Shares Isa, a great option for those willing to take more risk.
But cash Isas are the most common type, and they’re available to everyone in the UK aged 16 or over.
Easy-access Isas allow you to withdraw money whenever you like without incurring a penalty.
They’re a good option if you want the freedom to dip into your savings if you need to.
According to MoneySavingExpert, the top-paying Isa at the moment offers interest of 1.31%.
If you open the account Cynergy Bank and save £100, you’ll earn interest of £1.31 after a year.
Marcus and Saga both pay 1.3% but you can’t transfer in other savings, so you’ll have to start from scratch.
Fixed rate Isas
If you’re willing to tie your money up for a bit longer, you can earn more interest.
Fixed-rate Isas lock your money away for a set amount of time.
You will be able to access your cash if you need it, but there’s a penalty for doing so and it usually means you lose your interest.
The top-payer is Virgin Money with interest of 1.9% if you lock your money up for one year, and 2.25% if you tie it up for two years.
Bank bonuses
It’s not just Isas that can boost your bank balance. Various banks pay you to switch to them.
Five banks currently offer switch bonuses, and among the most generous is HSBC, which gives you £170 free cash for opening an account.
There's no monthly fee on the account, but you'll need to pay in at least £1,500 within 60 days in order to claim the bonus.
Regular savings account
If you’re looking for a regular bank account with interest, you can earn cash by depositing money each month into certain accounts.
First Direct offers 3.5% for one year, and you can pay in up to £300 a month.
Your interest rate will be slashed to just 0.1% if you try to access the cash before the year is out though.
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With NatWest and RBS you can earn 3.3% interest but can only pay in a maximum of £150 a month.
Santander and Nationwide's regular savings accounts both pay interest of 2.5% on up to £200 a month.
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