In its annual current account survey Which? found consumers could earn up to 85 per cent more interest if they switched from HSBC, Barclays, Natwest or Lloyds TSB to a smaller bank such as Cahoot.
The report found most accounts offered by the big four banks pay 0.1 per cent interest, equating to 0.40p a year with £500 in your account each month.
However, the five small banks named best buy current accounts for offering better rates were Smile, Cahoot, Nationwide flexaccount, Intelligent Finance and Alliance and Leicester with its premier direct account, which could earn you £34 a year.
Which? Money editor Martyn Hocking says” “The smaller banks typically offer better interest rates and superior customer service, so it’s baffling why people continue to bank with the big four.
“People mistakenly think it’s complicated to switch or that the extra interest isn’t enough to make it worthwhile, but there’s plenty to gain by switching.”