It's been clear for a while now that the options for savers are pretty dire. So I've been sifting for evidence of savings providers that treat their customers right. It's been a long and arduous task and I've come up with just a few positive finds.
I've been looking not so much at customer service as a whole here, but the interest rates offered to existing customers, and how such customers are treated when it comes to the end of a deal.
There are some whiffs of hope with a few providers though...
The best of 15 providers
I tested the 15 top providers – including a mix of building societies and banks – to see how they treat existing customers who took out their best easy-access savings account and held them over a two-year period.
On average these 15 providers halved their rates during that time, although some went down much more: from around 2.7% to just 0.5% or even 0.05%!
What might surprise you is that accounts that didn't have introductory bonuses actually fared slightly worse over the longer run, falling a little more and averaging less at the end. This debunks the myth that fixed bonuses are bad; bonuses are actually guarantees that your rate won't fall below a specified level for a while.
I found that just one of these 15 accounts didn't reduce its savings rate. The outstanding provider was Sainsbury's Bank, which has kept its rate for Online Saver customers at 2.7%. This is higher than new customers can currently get with any savings provider for this type of account. New customers can expect closer to 2% if they shop around today.
This was just a simple test. We don't know if Sainsbury's always treats its existing savings customers in this way (and it certainly isn't offering competitive products to new customers right now), but this behaviour certainly stands out as unusual and highly commendable.
Fair treatment at the end of a good deal
Two other providers have recently stood out as doing the best thing for their customers.
Metro Bank had customers coming to the end of a good one-year fixed-rate Cash ISA deal in January. It did not have a new version of the ISA available, but thought this was unfair on its existing customers. So it created a new one just for those existing customers to roll on to.
At the time it announced this, it allowed customers to move onto its last fixed rate of 2.65%, which was higher than any 12-month fixed-rate cash ISA available from any other provider.
National Savings and Investments (NS&I) also recently announced that customers who held some older Cash ISAs (paying just 0.5%) are to be moved automatically to its Direct ISA, paying a very competitive 2.25%. This ISA will also have a new minimum investment amount of £1 instead of £100.
It appears that this change might have been just to make its own administration easier, but perhaps time will tell whether this sort of action becomes the norm for the government-run savings organisation.
When loyalty pays
Those two cases are not normal, but at least one bank offers its existing bank customers quality exclusive deals.
First Direct, which has an excellent reputation for service, offers the best regular saver account by miles to its existing customers. It pays 8% interest for a year on contributions of £25pm to £300pm. This is perfect for anyone who already has emergency savings but wants to save some more from monthly income.
Note that, after a long run, new current account customers from 1st February 2013 will temporarily be unable to open this savings account.
The outlook isn't good
This is quite a motley collection I've managed to scrape together, which just shows that being loyal is usually a costly experience.
Savings providers have to offer high rates to new customers in order to compete with each other, but docile customers are hanging around long after these rates have plummeted. There's not much reason for most providers to maintain higher rates for lazy customers.