The U.K. Financial Conduct Authority proposed that all banks set a single interest rate across their easy-access savings accounts that it said would benefit savers by £260 million a year in higher interest payments.
The aim of the proposal is to improve competition by preventing banks from cutting rates over time, Christopher Woolard, executive director of strategy & competition at the FCA, said.
Each company can choose its own rate, which would apply at the latest after an account has been active for 12 months.
Banks will still be able to offer multiple introductory rates to new customers for up to 12 months and then lock in one rate for cash saving accounts and one for individual savings accounts.
The proposal would also require banks to report data every six months on the single easy-access rates they offer.