Lloyds Bank, Barclays, Halifax savers could get rates above 7% with these accounts

Savers with high street banks such as Lloyds Bank and Barclays have been urged to shop around as they could get much better rates. James Blower, head of savings at Zopa Bank, warned that many of the big name banks offer "some of the lowest interest rates on the market" and so being loyal to them means you could be missing out.

He said: "If you’ve built up a larger balance, you could be missing out on hundreds of pounds a year in interest by leaving your money in a low-rate account. Likewise, if you're saving regularly — say, putting aside money each month — moving to a higher-paying Regular Saver account like Zopa’s that offers 7.1% AER, could increase your returns."

Several providers currently offer regular saver accounts with rates of 7 percent or above, including the Co-operative Bank and First Direct, both at 7 percent, while Principality Building Society pays 7.5 percent.

The Regular Saver with Zopa pays 7.1 percent and you can deposit up to £300 a month. If you deposited the maximum amount and if the rate stayed the same for a year, you would earn £137 in interest.

You need to have a current account with the group to open a Regular Saver. Zopa recently launched its Biscuit current account, offering 2 percent fixed interest on your balance for 12 months, with no limit on how much you can earn.

You can also get 2 percent cashback on up to £1,500 of your direct debits for a year. Mr Blower said there are some key benefits to switching to a digital bank such as Zopa.

He said: "Some of the most developed digital banks include app-based savings tools that make budgeting and goal setting simple. For instance, Zopa Bank's features like Pots help you separate savings for different purposes, whether it's a holiday, emergency fund, or house deposit, up to 20 pots can be created in Zopa's Smart Saver.

"We also offer the option to build then automate a regular savings behaviour, and offer intuitive functionalities to skip or reschedule money transfers to your pots."

Many of the big name banks also offer regular savers, with Lloyds paying 6.25 percent fixed on monthly deposits up to £400 while Nationwide pays 6.5 percent variable on deposits up to £200 a month.

Savers may be reassessing their accounts as the Bank of England recently reduced the base interest rate, down from 4.25 percent to four percent.

Mr Blower spoke about which banks could cut their rates as a result: "Some providers will look to reduce rates by more than the Base Rate cut – not all banks will cut by 0.25% in response though, and some have already announced larger cuts too. Likewise, many banks were not pricing in anticipation of a reduction in base rate this month so the market may adjust harder than expected as a result."

He said analysts are predicting the base rate will fall further in the months ahead, with markets expecting it will drop to 3.5 percent next year.

The savings expert said that given the downward trend, now may be a good time to lock in a fixed rate to be protected from further rate decreases.