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.
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
Tesco Personal Finance
Yorkshire Building Society
Leeds Building Society
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."Earn up to 5% interest on your money: compare high-interest current accounts