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last mo.

UK Banks Raise Savings Rates to 5.25% While 'Zombie' Accounts Cost Savers Hundreds

Experts urge savers at risk of losing hundreds in low-rate accounts to switch into higher-yield products before expected base rate cuts.

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Overview

  • Challenger and legacy banks now offer easy-access and fixed-term savings paying up to 5.25% AER.
  • Lloyds Bank’s Monthly Saver pays 5.25% AER on up to £250 of monthly deposits, yielding £78.75 on a £3,000 balance over 12 months.
  • Chetwood Bank’s six-month fixed-term account delivers 4.5% AER, equating to £225 interest on a £10,000 deposit at maturity.
  • Chase Bank maintains its 5% AER easy-access deal for 12 months with unlimited withdrawals, earning £500 on a £10,000 deposit.
  • Personal finance experts warn an estimated 31 million savers in low-rate “zombie” accounts lose around £560 annually and recommend cash ISAs, direct debits and price-comparison tools to lock in top rates.