MILLIONS of savers trapped by penalties in poor-paying accounts have not benefited in full from last month’s interest-rate rise, as banks and building societies have manipulated rates to boost profits.

Halifax, Northern Rock, Britannia and Portman building societies have all failed to pass on May’s Bank of England rate rise in full to savers in notice accounts. Those with between £5,000 and £99,999 invested in Halifax’s 60 Day Gold account have seen their rate increase by just 0.05 percentage points from 3.25% to 3.3%. The rates on Britannia’s Premium Saver, a 30-day notice account, have gone up 0.1 to 0.15 points.

Notice accounts traditionally paid higher rates of interest than instant-access accounts because savers sacrificed some flexibility. As their name suggests, customers have to apply for a withdrawal in advance when they want their money, usually 30 or 60 days before. But in recent years they have been overtaken by internet-only accounts and the rates they offer have languished.

Sue Hannums at AWD Chase de Vere, an adviser, said: “Millions of people still have money in these deals even though most now pay less than the best easy-access accounts. They are soft targets when Bank rate rises because banks and building societies know savers have to give them notice to leave and many won’t bother. If you have money in such an account, move your savings elsewhere.”

The highest-paying alternative is ICICI’s Hisave account, which pays 6.05% on balances above £1. Some advisers do not recommend it, though, because the Indian bank has not signed up to the Banking Code. Other options are Icesave, which pays 5.95% on balances above £250, and Anglo-Irish Bank, which pays 5.85% on balances above £500.

Passing on measly increases to savers isn’t the only ploy banks have used to boost profits. Many have hiked overdraft rates by much more than rates have risen over the past year.

Last week, Lloyds TSB increased its overdraft rate for the third time in nine months. The authorised borrowing rate on its Classic Plus account has gone up by 3.1 percentage points since last September, compared with Bank rate which has risen by only one point. Its average authorised overdraft rate is now 16.1% though Classic customers are charged 19%, and Classic Plus and Select customers are charged 18.6%.

Mike Naylor at Uswitch, a price comparison site, said: “Lloyds TSB’s decision to increase its overdraft rates again is terrible news for the bank’s 8.1m customers. It currently holds a quarter of the country’s current account market, which means the three overdraft-rate increases will net the bank an extra £24m over the next year.”

Over the same period the rates on accounts in credit have gone up by just 0.12 points on average, and some have not increased at all.

HSBC, NatWest and Royal Bank of Scotland have also pushed up the cost of going into the red. HSBC has put up the overdraft rate on its Bank Account Plus by 3.1 percentage points and NatWest’s rates have risen by up to 2.62 points.

If you regularly use your overdraft facility it is worth switching your current account to a provider with competitive overdraft rates. Alliance & Leicester’s Premier Direct current account offers a 12-month interest-free overdraft, after which you are charged the standard rate of 5.9%.

Halifax’s Moneyback current account also has a competitive overdraft rate at 6.9%, while Nationwide’s Flex account has a rate of 7.75%.