Worrying trend in the savings market

The savings market has been awash new launches recently and many of them are significantly higher than the Bank of England base rate. This leaves little doubt that most banks and building societies remain very eager to raise retail funds despite the apparent lack of significant appetite for mortgage lending.

David Black, banking specialist at Defaqto, said: "One worrying trend that has started to emerge is the launch of a number of savings accounts on the market that discriminate against existing customers by restricting funds deposited to ‘new money' to the provider. They do not permit transfers to be made from existing accounts that are already held with the same provider."

"Introductory bonuses are routinely used to attract savers but these are generally also available to customers who have a different account with the providers."

"While it remains the case that many savings accounts are languishing with very low interest rates proactive savers can still get good deals if they're prepared to move their funds around to new accounts. Many of the variable rate savings accounts that get into the best buy tables are either new launches or are there by way of offering an introductory bonus. Savers should take advantage and jettison inertia."