After conducting research into the industry, price comparison site Moneysupermarket.com has claimed that supermarket banks do not always offer consumers the best deal. The research findings come 10 years after Sainsburys became the first grocery store to enter the UK finance sector.
For motor insurance, the online comparison group claimed that Sainsburys and Marks & Spencer offered a competitive policy while Asda and Tesco lagged behind with unappealing premiums, despite all supermarket banks offering motorists a 10% online discount.
For home insurance, Moneysupermarket.com advises homeowners to shop around as opting for a non-supermarket bank could save consumers at least 28% and, in some cases, up to half the cost.
Of all the supermarkets, the comparison site found that Sainsburys Bank’s internet saver offers the best easy access account, paying a 5.5% interest rate. However, in the broader market, it fails to enter the top five.
Surprisingly, in the credit card division, not one supermarket bank offers a 0% balance transfer deal longer than nine months. Furthermore, taking a loan out with a supermarket bank could be more expensive than expected, the research showed. For example, Marks & Spencer offers a rate of 9.9%, which is nearly double the 5.9% from Masterloan.
The early signs were certainly promising and there is no doubt that the new supermarket bank entrants forced the conventional players to improve their product offerings and become sharper on price, said Richard Mason, director at Moneysupermarket.com. Supermarkets traditionally offer cut-price deals in-store, but if you look across the financial markets they compete in now, the verdict is far more mixed, and in the majority of circumstances it pays to give those well-stocked aisles a wide berth in favor of better value providers.