Want to open a savings account? The main street branch will offer you lower rates

Savers are being deprived of thousands of pounds in interest because banks and building societies are withholding their best rates from customers who prefer to manage their accounts in branches, analysis by The Mail on Sunday reveals.
Some banks and building societies offer more than ten times more interest on their best online savings accounts than on equivalent accounts managed in person.
In some cases, customers who do not bank online are completely deprived of the most rewarding fixed rate savings offers.
Among the worst culprits are main street stalwarts including Santander, the Nationwide Building Society and the Post Office.
Experts say that providers who offer lower rates to loyal in-branch customers do so to maximize their own profits. Others suggest it appears to be another cynical ploy to keep people away from branches to justify further closures.
Andrew Hagger, personal finance expert at Moneycomms.co.uk, says: “Providers who do this care about their bottom line because online accounts are cheaper to operate. But that doesn’t fix things.
He adds: “Online rates have been better for a while, but the gap has really started to widen recently. Many providers pass on rate increases to online customers, but not to those who prefer to bank offline.’
Derek French, founder of the campaign for community banking, believes the gap between online and offline savings rates is part of banks’ strategy to justify branch closures.
He says: “Banks say they are closing branches because their customers want to go digital. However, many don’t want to, but are forced to or they miss out on better savings offers. It is unacceptable that people who prefer to do their banking in person should be disadvantaged in this way.
Anna Bowes, co-founder of rate scout Savings Champion, fears the poor treatment of customers in branches could come at a worse time.
She says: “With the rising cost of living, most people are feeling the pinch. Those who don’t bank online are more likely to be older savers who rely on interest on their savings, and more vulnerable customers for whom higher interest could make all the difference.
The worst culprits of branch discrimination
One of the worst offenders is Santander, who pays £27.50 in interest on £1,000 on his online-only instant access account – but only £2 on his equivalent account which can be managed in-branch.
Last week, Santander launched an Instant Access Savings Rate of 2.75%. The limited edition eSaver is available until early next month – although it could be withdrawn earlier if demand is overwhelming – and can be opened with a minimum of £1 on sales up to £250,000 .
But the account is only available for those who want to bank via computer or smartphone, as it has to be managed online or via mobile banking.
Santander customers who prefer to do their banking in-branch or over the phone are offered the Everyday Saver account. This pays only 0.2% interest, or 13 times less.
The situation is just as bad with easily accessible Isa accounts. Santander’s eIsa pays 2% for 12 months on balances over £500, but must be managed through online and mobile banking.
By contrast, those who prefer offline banking receive just 0.2% interest from an Easy Isa – on balances from £1.
A Santander spokesperson said: “There will be times when products may vary due to different market conditions in the digital space, but our multi-channel products, including our 1-Year Cash Fixed Rate Isas, 18 months and 2 years, offers customers some of the most competitive returns among large retail and digital-only providers.
Mutuals are not as cuddly as they seem
The Nationwide Building Society prides itself on its branch service. Unlike other providers who are closing branches en masse, it has promised not to leave any town or city currently served by the company without a branch until at least 2024 (it has closed some branches, however). But when it comes to savings rates, it’s a different picture.
Nationwide’s one-year fixed-rate online bond pays 4% interest, but 3.25% for customers who aren’t online. Likewise, its two-year fix is 4.5% online or 3.5% if off-line. The 3-year fixed-rate online bond pays 4.75%, but there is no equivalent bond for customers who prefer to bank offline.
Hagger says, “Nationwide’s advertisements claim it’s there for its members. But, in fact, it’s not there for you if you don’t save online. There are two levels of service. If you go online, he loves you and gives you the best deals. Otherwise, you have to bear what it gives you.
A Nationwide spokesperson said: “We compete with online and multi-channel providers. To ensure that we can do this, we sometimes offer online managed accounts such as our Fixed Rate Online Bonds.

He adds that branch staff will help non-digital active members open bonds online on the online bank or mobile banking app.
…and the Post Office is not much better
THE Post Office offers two tiers of savings rates – one for those who go online and a lower one for those who don’t.
A saver with £1,000 in the Post Office’s online Isa would receive £10 in interest after a year – but a saver who prefers not to bank online would only receive £6 in a similar account.
Meanwhile, £1,000 in his one-year online bond would earn £23 after a year – but only £17 in an equivalent offline account.
La Poste says the prices offered in branches will be increased to match those offered online on Thursday – three weeks after they were launched online. He says it takes longer to change branch rates because he has to print and distribute the new information.
Virgin Money snubs completely ‘offline’
Virgin Money offers some of the most competitive fixed rate savings bonds in the country. His one-year bond pays four percent — or 3.7 percent in an Isa.
Its two-year bond pays 4.27% – or 3.75% in an Isa.
But there is not a single fixed rate savings account available to offline customers. Virgin Money says: “For customers who prefer not to bank online, we offer a competitive range of products that you can request and manage offline.”
Millions of savers trust National Savings & Investments to protect their savings. Customers who manage their accounts online or over the phone can access a 1.2% rate on balances from £1.
But for those who prefer to operate by post, NS&I offers a rate more than 100 times cheaper. His investment account only pays 0.01%.
A spokesperson for NS&I said: “We do not promote the investment account to new customers and have a number of accounts, such as Direct Saver and Income Bonds, which pay a better interest rate than customers can choose as an alternative.”
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