How banks deprive savers of £10billion a year by slashing advertised interest rates Banks will be probed into how they change their interest rates Some payments can be slashed by 96 per cent overnight New Bank of England Governor Mark Carney admits savers might have to suffer By Sam Dunn Banks face a major investigation into the savings rip-off that deprives loyal customers of billions of pounds a year. The big high street names will be probed over the way they lure in customers with promises of generous interest rates - only to slash them months later. It leaves millions earning next to nothing on their savings. In the worst cases, interest payments can be slashed by 96 per cent overnight. Watch out: Banks will be probed into how they cut their interest rates after hooking in new customers Many savers do not realise the rate has been cut or fail to switch, and so lose out on hundreds of pounds a year. Figures from campaigners Save Our Savers estimate £400billion is languishing in accounts that pay less than 1 per cent interest. It could mean savers are missing out on around £10billion extra interest a year. Consumers are also left baffled by the array of accounts that are launched and then suddenly closed every month - leaving them with little idea of what interest they are earning. On Monday, Martin Wheatley, chief executive of the Financial Conduct Authority regulator, is expected to announce an investigation into the £1trillion savings market. It will be a victory for Money Mail's Get Britain Saving campaign, which has fought for fairer accounts. Mr Wheatley said: "I want to look into the bewildering array of savings accounts that are introduced and then withdrawn over the course of a year. These can make it difficult for a consumer to compare products and make a decision based on what is the best value for them. Rough wave: Bank of England Governor Mark Carney has said that savers may well suffer in the short term Last September, Halifax paid new customers a rate of 2.8 per cent for its Online Saver account, meaning for every £10,000 in savings, the interest earned would be £280. But the initial "teaser" rate, or bonus, on this account has now disappeared, leaving savers earning 0.1 per cent. This new rate would pay just £10 over the year - a 96 per cent drop. Lloyds Bank paid 2.5 per cent on its eSavings account a year ago, today it pays just 0.2 per cent. And Santander's eSaver paid 2.8 per cent last September. From Tuesday, this drops to 0.5 per cent for many customers. Since January, banks and building societies have cut rates on accounts 1,119 times. Some £125billion is now languishing in bank accounts paying no interest whatsoever, official figures reveal. Mr Wheatley said: "Competition in the market for cash savings has tended to focus on "teaser rates," with firms not unreasonably presuming that once in, the new customer will not move once the rate drops." Banks must write to customers with a bonus account up to 60 days before a teaser bonus rate ends. Savers are also being left baffled by similar-sounding account names with different issue numbers. For example, Manchester Building Society has 41 versions of the same identically-named account paying different rates. Justin Modray, of financial advice website CandidMoney, said: "The responsibility is on the saver to shop around and switch for a better deal. This allows banks to milk enormous profits from those who forget to switch after a bonus ends, or who simply fail to do so. In a bid to help savers, the Government commissioned a review by Carol Sergeant, the former chief risk officer at Lloyds Banking Group, to find a way to improve transparency. It has ordered banks and building societies to launch easy-to-understand savings accounts to restore trust. New Bank of England governor Mark Carney has said savers must suffer in the short term to give the economy a boost. In his first major public speech, he stressed savers - earning just an average of 0.7 per cent interest on an easy access account - had to make sacrifices for a more robust economy that would benefit everyone. The base rate has been held at a historic low of 0.5 per cent since March 2009. A Lloyds spokesman said: "We encourage customers to review their savings rates regularly, and are transparent in publishing the current interest rate customers are receiving online and on statements." A spokesman for Santander said: "Customers are made aware that the account carries a bonus period from the outset."