Online only cash ISAs typically pay more interest than in-branch accounts

Analysis of the cash ISA market by Governor Money has found that online only products pay 7.3% more interest than in-branch accounts.

Across the whole market, which currently consists 373 products, ISAs available online pay an average of 2.64% AER [Annual Equivalent Rate] whilst in-branch accounts pay 2.46% AER – a difference of 7.3%.

The average ISA balance is currently £10,550 and savers who opt for an in-branch account are missing out on £18.99 a year in interest payments by not going online – despite the fact that that the majority of people now research their savings products online.

When asked how they research savings products, 73% of the public said they primarily use the internet while 36% of people go in-branch for information.

Almost half (49%) of people with an ISA have never opened an account online, and this isn’t likely to change any time soon. 62% of people said they were unlikely to open an ISA online in the next twelve months compared to 20% of people who said they were likely to do so.

Commenting on the findings, Miles Bingham, CEO of Governor Money said: “Savers who overlook online ISAs are missing out on additional interest. We are in a low interest rate environment and for those with an average balance, an online account is great way make your money work harder.

“The internet isn’t just a shop window and place to research the best deals it is also a place make purchases. We have taken this to heart in many areas such as with books and music but when it comes to savings, people still seem reluctant, this is despite the fact that the majority of people are using the internet to research their savings products. It makes sense to take the process one step further and apply online.”

Governor Money offers savers a hassle free way to manage their cash and get a competitive return with a single secure account. With personal rate alerts and easy to view current rate and maturity information, savers who use Governor Money can easily keep track of their cash and need never unknowingly drop to a low interest rate. All banks and building societies available through Governor Money are protected through the UK Financial Services Compensation Scheme.

For more information, visit governormoney.com.