Banks Failing To Reward Large Savings Accounts With Higher Interest Rates: Research

[Legal Beagles]

People who save large amounts of money are not being rewarded with higher interest rates, research shows.

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[argentarius]

Re: Banks Failing To Reward Large Savings Accounts With Higher Interest Rates: Resear

... but why should they?

A study of savings account behaviour would demonstrate that those with lower balances are, on average, less likely to care whether they are getting the very best rate on their funds, and are therefore more likely to leave their money in the account even if the rate is somewhat lacklustre.

Whereas, conversely, those with huge balances have a far greater incentive to move it to where the best rate is.

The costs of managing an account, particularly online, are next to nothing so there are few economies of scale in managing one big balance account compared to ten smaller balance accounts making up the same balance in aggregate. So it's in banks' and building societies' best interests not to pay particularly high rates to higher balances.