RACHEL RICKARD STRAUS: Old banks ripping us off but we won't switch

Rationally, I know my money is safe in a bank. It has been 15 years since it looked like a bank was going to fail.

Worried Northern Rock savers lined up for hours outside its branches to withdraw their money.

The government was determined that a run on a bank would never happen again. And since then, the protection of savers has been considerably strengthened.

Blowdown: The base rate is already 3.5%, but Lloyds, NatWest and Barclays are still only paying 0.5% on their easy access accounts

They are guaranteed to get their money back if their bank fails. All they have to do is choose a bank with FSCS protection and deposit no more than £85,000 in any bank.

I know all that. Money in a bank is safe.

But, although I’m embarrassed to admit it, there’s still a bit of me that’s unreasonably wary of new banks without a long track record.

Take last month when I was looking for a new easy-to-access savings account.

The rational thing to do would have been to choose the bank with FSCS protection that offers the highest interest rate.

After all, the banks with this protection are all equally safe for deposits, whether they have been around for a week or a century, whether they have 1,000 customers or ten million.

But I did not do it. I scrolled through the top two or three choices because I had only vaguely heard of them. Instead, I chose one with a lower interest rate, but which was much better known.

My mistrust did not stop there.

I chose a digital bank, which only works through an app. The process couldn’t have been easier or more convenient. I downloaded the app to my smartphone, entered my details and within minutes my account was up and running.

I’m thrilled with how the app works and its impressive array of security features, but for some reason I’m still worried.

I don’t have a single piece of paper – or even an email – from this bank because everything is done through the app. I know everything is going to be fine, but I always find myself thinking: if the bank’s app suddenly disappeared or crashed, what record would there be of it being in possession of my hard-earned savings?

As illogical as it is, there’s always something comforting about receiving paper bank statements, knowing where you’d be in line if you ever wanted to claim your savings, and about banks that have been proven for decades. .

I’m sure over time I’ll get more comfortable with the idea of ​​new digital-only banks. Several are even leading the way in the latest anti-fraud technology.

But what frustrates me is that the old traditional banks are now making a lot of money thanks to the mistrust of people like me.

The Bank of England is expected to raise interest rates again next week – by a quarter of a percentage point or even double.

Shortly thereafter, many new challenger banks will pass on the rate hike to savers. The interest they pay is already generous: some offer rates of up to 4.5%. They are likely to raise rates further.

But, we won’t hear a peek from most traditional high street banks. They have failed to pass on previous rate hikes to savers in recent months, so there is no reason to believe they will start now.

The base rate is already 3.5%, but Lloyds, NatWest and Barclays still only pay 0.5% on their easy access accounts, Santander 0.55% and HSBC 0.65%.

Banks know they retain the trust of millions of their customers and are ready to take full advantage of it. They exploit the fact that many of us are too suspicious to walk away from the bank we’ve been with for years – often since childhood.

Savers are now missing out on billions of pounds in interest by sticking with cardholders instead of trusting a challenger bank.

I know change can feel like a leap of faith.

But we just can’t let the old banks get away with this any longer.