Over half of Moneywise users play the banks to boost savings
Over half (58%) of Moneywise.co.uk users play ‘current account ping-pong’ to boost their savings rates, our latest poll results reveal.
Bank and building society current accounts have proven a winner for cash savers over the past year, typically offering higher interest rates than traditional savings accounts and tax-free individual savings accounts (Isas).
- See our Top current accounts guide for the weekly updated best buys
And the findings of our latest poll reveal that 58% of the 1,113 who voted use more than one current account simultaneously to boost savings through high interest rates and joining bonuses. The phrase “ping-pong” refers to people batting cash between each account to ensure they meet the minimum pay-in that most banks require to access these deals.
A further 6% of those who voted add that this is a method they’re going to take up in 2017 in a bid to boost cash returns.
But current account providers have scaled back deals of late, after the Base Rate was cut from 0.5% to 0.25% last August, and 8% of those who voted say that while they’ve played current account ping-pong in the past, this isn’t something they’re going to continue with in 2017 due to falling rates.
Meanwhile, a quarter of those who voted (25%) said the system isn’t for them, as they believe it’s too complicated or time consuming to organise.
Another 3% selected the ‘Other’ option, with some saying they’re happy with the one account they have due to the high interest rates or good customer service already on offer.
See the pie chart below for the full findings (click to enlarge).
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.