FCA introduces new rules for cash savings accounts

From December 2016, firms will have to provide clear information on interest rates offered on cash savings products as well as clearly reminding consumers about changes in interest rates or the end of an introductory rate.

The FCA has also published the first set of data on the lowest interest rates offered by 32 providers of easy access cash savings accounts and easy access cash ISAs. The FCA will be publishing this information on a trial basis for 18 months at six-monthly intervals.

In its cash savings market study, the FCA found that accounts opened a long time ago pay lower interest rates than those opened more recently. Despite this, a significant number of consumers do not move their money to accounts that might pay more interest – even with the same provider.

The FCA is also working with industry to deliver seven working day switching for the vast majority of cash ISA transfers from January 2017.

Christopher Woolard, Director of Strategy and Competition at the FCA, said:

“With many savers never switching because they don’t think it will make a difference, our rules will help consumers get the information they need to shop around. In a good market, providers should be competing to offer the best possible deal and should a consumer wish to move accounts, they should be able to do so with the minimum of fuss.

“Our rules are about giving consumers the facts they need to make an informed decision about what to do with their savings, and the ability to act on it quickly.”