Savers looking for a home for their cash are being promised a "one-stop shop" to help them to find the best deal.
Governormoney.com is a new website launched by former executives at Barclays and Credit Suisse which mirrors the approach of the investment fund supermarket industry in the £1.1trn cash ISA market. Users deposit their money in a Governor account and buy and sell savings accounts with a range of providers offering fixed rate term accounts as well as instant access cash ISAs.
"We offer a single account with your own login which offers a choice of providers and accounts," said Andrew Booth, co-founder of Governor. "We help people save time and trouble because they only have to go through one money laundering identity check at the outset, and then they have access to a range of accounts and can switch providers without all the paperwork and hassle. It is particularly useful for those with more than £85,000 to invest – the limit for the financial services compensation scheme – who want an easy way to distribute this account so they are protected."
However, to date, Governor has only four providers signed up, all of them very small building societies: Saffron, Hanley Economic, Progressive and Cambridge. "We are in advanced discussions with eight more building societies and hope to have 20 providers by the end of the summer," Mr Booth said.
Michelle Slade from the financial information site Moneyfacts says that Governor could help to counter inertia over savings rates, but there are caveats. "It's an innovative idea and there are many people with money in poor paying accounts who could benefit from an easy one-stop shop," she said. "However, the devil is in the detail. For people with less than £10,000 to pay in Governor levies a £10 annual fee and the rates on offer are not the best buys as yet." She points out that one of the four providers signed up, Progressive Building Society, is offering savers who come to them directly a better deal than those who goes through Governor.
She added: "On the Governor website the Progressive has a five-year bond paying 4.10 per cent, but they have a product available to all paying 4.50 per cent. The three-year pays 3.61 per cent on the site, but 4.05 per cent for all."
In response, Mr Booth says rates on the site are at the discretion of the providers and that they have no say. "Each company will have to decide its own approach but we are confident of having tens of thousands of savers signed up by later this year and that should help competition."