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FCA opens discussion on introducing a basic savings rate

Theo Osborn | 14:36 Wednesday 25th July 2018

The FCA is considering the introduction of a basic savings rate (BSR) in the cash savings market in its new discussion paper.

This would involve providers applying single interest rates to all easy access cash saving accounts and easy access cash Isas after they have been open for a set period of time.

The BSR is one of the options set out by the FCA to address issues faced by longstanding customers who generally receive lower interest rates than those who shop around.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “While many customers have valid reasons for not shopping around, providers must still treat them fairly, while maintaining competitive rates for those who do. 

“Efforts to encourage customers to switch have had limited impact and we remain concerned about the way firms are treating customers. 

“This is why we are considering the introduction of a basic savings rate for older accounts, which would promote competition and help get customers a better rate of interest.”

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