Money Insider: Is it always the banks' fault?

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The Independent Online

Rarely a day passes without there being a verbal attack on the banks; it seems to be in vogue to rant about excessive bonus payments, overcharging, branch closures and unsatisfactory customer service. Whilst some of the bad press is justified, sometimes we need to take a step back and remember that the customer isn't always getting a terrible deal and in the main has more than enough common sense to manage his or her affairs without being spoon-fed.

This week the consumer group Which? claimed that savers are being "kept in the dark" about poor savings rates by their bank and so are missing out on a total of £12bn in interest every year. I agree that there needs to be more transparency, and that savings rates should be clearly indicated on all customer correspondence and highlighted on bank websites, but not everybody has a sufficient level of savings that they feel would make it worth the effort of transferring their account.

Research from HSBC suggests that 30 per cent of adults have £249 or less in savings, so if you're in that category and decide to switch your £249 nest egg from an account paying 0.1% to the best instant access account at 2.90% (Post Office Online Saver) you'd be better off to the tune of £5.57 per year after tax, or 11p per week. Perhaps that helps to explain why everyone doesn't have that burning desire to move their account.

Those with a more substantial savings balance are more likely to monitor their monthly or annual interest payment and make use of the numerous newspaper best buy tables and comparison sites to find the best deals.

There's certainly no sign of a decline in savings-related activity on, and I'm sure that this ultra-low rate environment has prompted many more customers to take responsibility and dig out their own torches to find the best deals amongst the so-called savings darkness.

Coventry Building Society launches 'Poppy Bond'

Savers seeking a decent return on their money will welcome the latest version of the Poppy Bond from Coventry Building Society, paying 3.50 per cent gross/AER fixed until 30 April 2013. The rate on this two-and-a-half-year bond is very competitive when compared with the best 2-year fixed deal at 3.60 per cent and best 3-year bond at 4.15 per cent, both from Bank of Cyprus UK. As well as a good return for the customer, Coventry Building Society will donate 0.20 per cent of the total amount invested in this bond to the Royal British Legion. Previous bonds have raised over £3.8m for this cause since the poppy product range was launched two years ago. The much-valued work of the Royal British Legion is as important and relevant now as it has ever been, and let's hope this latest bond leads to another significant donation.

The Poppy Bond can be opened in branch, online or by phone and has a minimum balance requirement of £500. There is a monthly interest option of the account available, but as with the majority of fixed rate accounts, be aware that there is no access to your capital until maturity.

Mortgage latest

a further cut in rates now sees the First Direct five-year fixed-rate mortgage priced at 3.89 per cent to 65 per cent loan-to-value (LTV) with a £99 fee. ING recently launched a five-year fixed at 3.69 per centwith a £1,945 fee (60 per cent LTV), but First Direct's deal will prove a better bet for some due to the much lower fee.

These fixed rates may be low enough to tempt people into remortgaging. But with some homeowners enjoying standard variable rates as low as 2.5 per cent, it's no surprise remortgaging activity is at a 10-year low.

Barclays' new "great escape" variable rate deal is, however, competitively priced at 2.18 per cent plus base (currently 2.68 per cent) for those with at least a 30 per cent deposit and will undoubtedly tempt some people to switch, particularly with no application and legal fees, free valuation and £300 cash back. The other plus point with the Barclays tracker is that you can switch to one of the bank's fixed-rate products at a later date without penalty.

With the mortgage market subdued and unlikely to pick up in the short term, other lenders may have to trim rates to maintain business levels.

Andrew Hagger is a money analyst at

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