MoneyExpert.com, the price comparison site, says a “savings war” among internet banking brands could break out “with a vengeance” within weeks.
The independent financial comparison website predicts that financial services brands will continue to react to Bank of England base rate rises in a bid to lure new customers.
The prediction comes after Sainsbury’s Bank announced this week it would be increasing the interest rate on its Internet Saver from 5.75% to 6% despite no change in the base rate this month.
MoneyExpert.com chief executive Sean Gardner says: “The days of the 6% savings account seem a long time ago but we believe they’re set to return with a vengeance over the coming weeks.”
He adds that consumers have not had a selection of savings accounts offering 6% or more since 2001 and that a combinations of the Bank of England base rate and a flux of new entrants to the market are acting as catalysts for this new savings war.
Landsbanki direct brand Icesave, which launched in the UK last year, pays 5.95%, while HSBC and Northern Rock both already offer online accounts paying 6%. Sainsbury’s Bank is in the process of relaunching and has appointed ad agency Abbott Mead Vickers.BBDO and media planning and buying shop PHD North to relaunch the brand and launch its first advertising campaign for a year.
MoneyExpert.com’s prediction also comes as Royal Bank of Scotland-owned insurer Direct Line takes a swipe at price comparison sites, which it labels “middle-men” in its latest advertising.
The criticism has led websites including Confused.com to defend their role, as has been reported on marketingweek.co.uk.