Are you making this savings account mistake?

Those who use in-branch savings accounts are worse off than those who manage their money online, research finds.

Are you making savings account mistakes?

People who bank in-branch only get a ninth of the interest paid on their savings compared to online customers, according to new research.

The Financial Conduct Authority (FCA) said easy access savings accounts that are handled in branch now pay an average of 0.25% to new customers compared with 0.5% for those who use internet-only accounts.

In a bid to encourage people to shop around, the watchdog has named and shamed banks offering the worst rates or lower returns for branch-based accounts.

In some cases there are huge disparities between different types of accounts.

At the Post Office, branch-based accounts typically paid 0.1% compared with 0.9% for its online accounts.

Some examples

Below are just a few examples but you can read the entire list in the FCA's report.

Branch access average interest rate

Online average interest rate

West Bromwich Building Society

0.20%

0.90%

Tesco Personal Finance

0.60%

1.01%

Yorkshire Building Society

0.25%

0.50%

Leeds Building Society

0.50%

0.75%

Co-op

0.25%

0.40%

Santander

0.25%

0.35%

What is being done about it?

Banks say that it costs more to run a branch than it does to offer services online.

However, the FCA has brought in new rules that force banks to be clearer about their interest rates in their promotions and when customers open new accounts.

On top of that, they'll have to remind people about changes to interest rates when an introductory bonus ends.

Christopher Woolard, executive director of strategy and competition at the FCA, said: "The new rules will help consumers get the facts they need to make an informed decision about what to do with their savings.

"One of our regulatory priorities is the treatment of long-standing customers and we want to see all customers benefit from competition and innovation in financial markets."

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