Big Banks Offer Higher Savings Rates Through Under-the-Radar Brands

Major banking institutions are offering savings accounts with interest rates exceeding 4 percent, but these deals are not readily available through their main websites or physical branches. Customers must seek out separate brands operated by these banks to access the higher rates.

For example, NatWest's digital savings brand, First Active, recently launched an Instant Access Savings Account with a 4.5 percent interest rate on deposits as low as £1. This account allows unlimited withdrawals and can be linked to any current account for easy fund transfers. In contrast, NatWest's own Flexible Saver account offers only 1 percent on balances up to £25,000, and its Defined Access Saver provides 2.5 percent, which drops to 1.04 percent after three withdrawals within a year.

Barclays is providing competitive rates through Tesco Bank, with its Internet Saver offering 4.21 percent, which includes a 3.16 percentage point bonus for the first year. This is considerably higher than the 1 percent offered by Barclays' Everyday Saver or the 3.96 percent on its Rainy Day Saver, which is capped at £5,000 with a reduced rate of 0.7 percent on higher amounts.

Santander's offshoot, Cahoot, offers a Simple Saver account with an interest rate of 4.52 percent. However, this rate typically reverts to 1 percent after one year. Santander's direct Everyday Saver account offers 2 percent, falling to 0.9 percent after one year.

Lloyds Bank's subsidiary, MBNA, currently offers a less competitive easy-access account at 0.75 percent. However, Lloyds offers a one-year fixed-rate bond through its main brand at 4.85 percent, compared to 3.8 percent on its own website.

HSBC has partnered with the savings platform Raisin UK to provide an Easy Access Account with a 3.51 percent interest rate, featuring no bonus or withdrawal restrictions. This rate surpasses the significantly lower rates found on HSBC's own website.

These alternative accounts can potentially earn savers an additional £350 per year on a £10,000 deposit compared to traditional accounts, sometimes yielding triple the interest. While some of these accounts include introductory bonus rates or withdrawal limitations, they provide a higher yield for customers who prefer to maintain relationships with established banking names for reasons of perceived convenience and security.