Easy access savings accounts: beware the hype
Many so-called easy access accounts come with strings attached, warns Sylvia Morris.
19th February 2020 09:28
by Sylvia Morris from interactive investor
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Many so-called easy access accounts come with strings attached, warns Sylvia Morris.
Easy access accounts are getting increasingly complicated. Savers are required to trawl through a host of terms and conditions to see how and when they can get their hands on their money, or if their rate will plummet after 12 months.
Investec Bank research shows that of the top 20 easy access accounts ranked by the rate paid, only six come without withdrawal restrictions, penalties if you make more than the allocated number of withdrawals, or a short-term bonus where the rate plummets after 12 months.
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Andrew Hagger, a savings expert at Moneycomms.co.uk, says: “It’s disappointing that many ‘best buy’ so-called easy access deals come with strings. Savings providers seem to be looking for new ways to play the best-buy tables.”
Nearly a third of the top-paying 100 accounts come with limited withdrawals. Virgin Money’s Double Take E-Saver at 1.31% and Yorkshire BS’s One Year Limited Access Saver at 1.3% are both near the top of the best-buy tables. WithYorkshire, you can only make withdrawals on one day a year, when you can make as many as you want. The rate only lasts for 12 months, after which you are shifted into another account with a lower rate. With Virgin Money you can make only two withdrawals a year.
Britannia’s Select Access Saver 11 pays 1.3% and lets you make four withdrawals a year. If you make more, the interest rate tumbles to just 0.3%. With Post Office Online Saver at 1.32%, the rate drops to 0.55 after 12 months.
Money Observer does not include accounts with complicated terms and conditions in its star buys.
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
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