The ‘easy-access’ accounts – with strings attached
New research shows that more than half of the top 50 savings accounts labeled as “instant access” actually come with a series of snags
More than half of the top 50 savings accounts labeled as “instant access” actually come with a bunch of catches, new research finds.
Only 23 of the top 50 accounts are considered truly instant and have no penalties, restrictions on withdrawing money or relying on short-term bonuses to increase returns, according to analysis by investment group Investec.
Easy access savings accounts are usually preferred because of the freedom they give you to pay and withdraw money as and when you want.
However, most have terms and conditions restricting access, with 18 of the top 50 limiting the number of withdrawals customers can make.
Meanwhile, 13 charge interest penalties or reduce the rate paid to depositors who exceed the number of withdrawals allowed in the terms of their accounts, according to research from MoneyComms.
Strings attached: only 23 of the top 50 accounts are considered truly direct and there are no penalties
David Hunt, from Investec, says: ‘Savings accounts are supposed to be transparent and easy to use, but unfortunately too many aren’t, plus a range of terms and conditions that can easily be overlooked.
“Clients should always look beyond the nominal interest rate and check whether there are any restrictions or penalties around access to their money or whether their deal is contingent on a short-term bonus.”
The average percentage of leading easy-to-access accounts is 3.24 percent — more than double the average from last summer.
Building societies and smaller banks announced a new round of interest rate hikes in recent weeks after the Bank of England pushed up key interest rates to a 15-year high of 4.5 percent.