A MAJOR high street bank, serving nearly two million customers, is pulling the plug on its savings accounts for all customers.
Sainsbury’s Bank has announced it will no longer accept applications for savings accounts from either new or existing customers.
In a statement on its website, the bank said: “Thank you for your interest but we are no longer accepting savings applications from new or existing customers.
“Any savings applications made prior to March 13, 2025 will continue to be processed and completed accordingly.
“If you are an existing customer, as always, we remain fully committed to providing you with the best possible service and want to reassure you that there are no immediate changes to your products or services.”
The move comes as Sainsbury’s Bank prepares to transfer its personal loans, credit cards, and savings accounts to NatWest under a proposed agreement subject to court approval on April 15.
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All insurance and travel money services will continue to be available as they are not included in the proposed transfer.
However, if the transfer is approved, all Sainsbury’s credit cards, loans, and savings accounts will be transferred to NatWest ownership from May 1.
Existing customers with a savings account or cash ISA at Sainsbury’s Bank will not be immediately impacted by the changes.
You will still be able to access your account as usual, check balances and account details, and transfer money (unless your funds are in a fixed-term account) by logging into Sainsbury’s online banking.
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Your username, password and security details will also remain the same.
However, Sainsbury’s Bank has stated that once your accounts are transferred to NatWest’s systems – expected to happen towards the end of 2025 – you will no longer be able to access them via Sainsbury’s Bank’s online banking.
To manage your accounts after the transfer, you will need to take certain steps to set up access through NatWest’s online banking platform and mobile app.
Further details on how to do this will be provided closer to the time.
Sainsbury’s Bank withdrew its credit cards and loans for new customers last August in preparation for the NatWest takeover.
What does the latest change mean for me?
Once your savings accounts are transferred to NatWest’s systems, your savings account will automatically become a NatWest account.
You will receive a new sort code and account number when your account is set up, and NatWest will contact you closer to the time to provide these details.
If you currently hold a Sainsbury’s Bank ATM card, you will be issued a new NatWest ATM card along with a new PIN.
You will still be paid the same amount of interest on your savings account and in some cases the interest rate may increase.
If you have a fixed-term account and your interest rate is lower than NatWest’s lowest rate then it will allow you to access your funds early.
It will pre-pay the interest you would have earned if your account stayed open for its original term.
NatWest will contact you at least 60 days in advance to let you know if this applies to your accounts.
If you have a Defined Access Saver and your interest rate is lower than NatWest’s lowest rate then your account will move to a NatWest Primary Savings account and you will have access to your money whenever you need it.
In all other cases your account will be moved to a NatWest Defined Access Saver and you will continue to be able to withdraw your money at least three times.
NatWest may adjust how often your interest is paid.
For example, you may begin receiving interest monthly instead of annually, or vice versa.
NatWest has committed to providing at least 60 days’ notice for any changes to your account or interest payments, ensuring you have time to review and prepare.
HISTORY OF SAINSBURY’S BANK
SAINSBURY’S Bank, founded in 1997, started as a joint venture between J Sainsbury PLC and Bank of Scotland, a subsidiary of Lloyds Banking Group.
The supermarket took full ownership of the business back in 2014 for £248million.
However, six years later, new (and remaining) chief executive Simon Roberts announced the supermarket would embark on a “food first” strategy to refocus on its core retail offering and improve returns.
Last summer, Sainsbury’s Bank offloaded its £479million mortgage book to Co-op Bank.
The bank has about 1.9 million active accounts and offers a range of banking products to retail customers only, including credit cards, savings, personal loans, general insurance and travel money.
It also operates a network of ATMs and in-store travel bureaux.
In June 2024, NatWest announced a deal to purchase Sainsbury’s Bank.
Sainsbury’s Bank will pay out £125million to NatWest and £250million to Sainsbury’s as part of the agreement.
What will happen to my cash ISA?
NatWest will become the ISA Manager for all Sainsbury’s Bank ISAs from May 1, 2025.
Other than the change in ISA Manager, your ISA will continue to function as normal.
If you hold ISAs with both Sainsbury’s Bank and NatWest/Ulster Bank Northern Ireland, the accounts will remain separate, and you can continue contributing to them within the £20,000 annual ISA allowance.
To preserve the tax-free status of your ISA, the change in ISA Manager will be handled via an HMRC-managed bulk transfer process.
Customers will receive a separate notification regarding this process at least 30 days before the transfer.
Customers who do not wish to transfer their ISA to NatWest can opt out of the bulk transfer.
To do this, they must either close their ISA (losing its tax-free status) or request a transfer to another ISA Manager.
Requests must be submitted by March 20, 2025 to allow sufficient time for processing ahead of the May 1, 2025 transfer.
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If opting out, any notice periods, penalties, fees, or charges will be waived between February 27, 2025 and July 1, 2025.
After the transfer to NatWest, customers will still have the option to move their ISA to another provider at any time, subject to NatWest’s terms and conditions.
How do I find the best savings rates?
WITH your current savings rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research price comparison websites such as MoneyFactsCompare.co.uk and MoneySupermarket.
These will help you save you time and show you the best rates available.
They also let you tailor your searches to an account type that suits you.
As a benchmark, you’ll want to consider any account that currently pays more interest than the current level of inflation – 2%.
It’s always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example.
If you’re saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.
