Online savings accounts 'give better rates'

Shopping for a current account online could earn customers better interest rates, claims a comparison website.

Research by moneyfacts.co.uk shows that there can be a difference of almost two percentage points between what savers are offered by banks on the high street and the deals they could find online.

According to the website, an online best buy account such as Northern Rock’s Silver Savings Online could earn a saver up to 5.71 per cent interest while the best that the high street can offer is 5.25 per cent.

Low rates can mean that customers are effectively losing money.

Rachel Thrussell, head of savings at moneyfacts.co.uk said : "With inflation (RPI) reaching 4.6 per cent, many branch based high street accounts just don’t keep pace, so keeping your savings in one of these accounts will see the real value of your money decrease over time."

While many online accounts earn interest from and can be opened with only £1, many high street accounts only pay out their advertised gross interest when an account has accumulated certain amounts of money. The high street’s best interest deal requires £5,000 to be in the bank.

Meanwhile an HSBC branch in Dorset has refused access to tellers to customers who have less than £50,000 in the bank, a significant mortgage or a salary of over £75,000.