Get 3.5% on your savings NOW – difference between £15 and £350 a year

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There is now a huge gap between the best and worst savings accounts. This makes it more vital than ever to shop around for a top deal.

I have criticised Barclays Everyday Saver for paying customers just 0.01 percent a year, despite the Bank of England hiking rates five times since December.

Now it has finally acted, and is paying loyal customers 0.15 percent on balances of £1 to £99,999.

That is still a dismal return, with base rates now standing at 1.75 percent, and likely to hit 2.25 percent at the next BoE meeting on September 15.

There is no point moaning about it, Barclays says this account is only for savers who leave small sums of money in there temporarily, and has no plans to lift rates to best buy standards.

Instead, you have to vote with your feet.

There are some top deals out there today, as smaller “challenger” banks constantly new launch savings rates at levels we haven’t seen in a decade.

New market-leading deals are being launched almost everyday (and pulled just as quickly as they are oversubscribed).

A quick search on Moneyfacts shows Shawbrook Bank paying 1.81 percent on easy access and United Trust Bank’s one-year fixed-rate bond paying 3.35 percent.

The Close Brothers Savings fixed-rate bond pays 3.50 percent a year, fixed for two years.

If you have £10,000 of savings in Barclays Everyday Saver, you would currently be getting interest of just £15 a year.

Switching to Shawbrook would give you £181 a year, while the Close Brothers account would pay you £350.

Shopping around for a better deal seems like a no brainer. We all do it automatically in the supermarket to save a few pennies, so why not with your savings when more is at stake?

More than 10 million don’t, leaving a staggering £1 trillion sitting in easy access accounts on rock bottom rates.

Somebody with £10,000 in a savings account paying 0.15 percent could increase their annual interest from £15 to as much as £350 by shopping around.

For some, it seems like too much effort, but switching online current savings account online is easier than you think.

You could make it simpler still by switching to a savings platform such as Hargreaves Lansdown, Raisin UK, Aviva Save, Interactive Investor cash savings or Flagstone.

These platforms offer exclusive deals and once you have set up your account, switching is a lot easier than applying to a new bank from scratch each time.

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More than half of cash savers do not understand the threat inflation poses to their money, according to research from Legal & General.

Incredibly, just over one in seven believe it will leave them BETTER OFF. Trust me, it won’t.

If you have £10,000 in the bank earning 0.15 percent interest and inflation is 13.3 percent, the value of your cash will fall be a staggering £1,315 a year in real terms.

That will reduce the spending power of your £10,000 to just £8,685.

Inflation will still shrink the value of your capital if your savings account pays 3.5 percent, but at a slower rate.

This failure to switch accounts is great news for the big high street banks, because it allows them to get away with paying next to nothing.

It’s a nightmare for savers, though.

Managing your finances can be complicated but this is simple. If your bank is giving you a rotten deal, leave.

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