Struggling Co-op raises rate on easy access savings account

This new account is by far the best easy access account on the market, with the next best account paying 1.4pc (Yorkshire Building Society).

Savers putting £20,000 into the account would accrue interest of £330 each year (before tax). In comparison, putting the same amount in the Yorkshire account would earn savers £280 a year.

"It is rare at the moment to see changes made by providers among easy access accounts and even more rare to see an improved rate as a result," said Sue Hannums of rate-monitoring site SavingsChampion.co.uk.

The Co-op has faced a turbulent year and is trying to shore up its finances. Customer numbers have started to dwindle in the wake of negative publicity, most notably, when the bank's former chairman Paul Flowers (pictured below), was accused of possessing drugs .

^{Disgraced former Co-operative Bank boss Paul Flowers}

The Co-operative group made a loss of £2.5bn in 2013, of which £2.1bn was traced to the banking arm.

As a result, it has recently attempted to attract new current account customers by offering cash incentives. It offers £100 to those who switch using the new switching guarantee service, donating a further £25 to charity.

Improving the rate on its easy access savings account seems to be another move to win over new customers.

"Hopefully, this is the start of better news for savers, although it may be too soon to get excited, as this could be simply a case of a provider needing to get funds flowing in through the doors," Ms Hannums added.

Those who may be worried about putting their money into the Co-op should remember that £85,000 per customer is protected by the Financial Services Compensation Scheme (FSCS) safety net in the event of the bank failing completely.

>> Should customers ditch troubled Co-op Bank?

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