- Some top-paying deals allow only a small number of withdrawals each year
- Other easy-access providers only allow a few weeks for savers to deposit cash.
- Other deals include a bonus interest rate that lasts just one year.
Savers should be wary of top-paying accounts that come with expensive catches.
Some so-called easy-access accounts with market-leading rates actually have strict rules on when customers can make withdrawals – and even deposits.
And those with fixed-rate bonds run the risk of not being able to access their money at the end of the term if they fail to tell their bank they don’t want it to be rolled over.
Hidden Catch: Some so-called easy-access accounts with market-leading rates actually have strict rules on when customers can make withdrawals — and even deposits.
The amount of cash held in easy-access deals rose from £179 billion to £958 billion during the pandemic.
But despite this as the name suggests, many deals do not allow savers to dip into their accounts whenever they want.
And if you make too many withdrawals, your rate could drop to 0.1 percent or you could even be charged.
Coventry Building Society’s new Four Access account pays the top 0.65 percent and allows savers to withdraw money up to four times a year.
If you do more then 50 days interest amount is charged – which works out to £4.45 for a £5,000 withdrawal.
Aldermore Double Access, which pays 0.6 percent, allows only two withdrawals in a year.
After this your rate will come down to 0.1 percent. Meanwhile, Family BS Premier Saver, which pays the top 0.65 per cent, gives savers only a few weeks to deposit cash.
You can’t put in any more after its November 3rd deadline.
Other deals include a bonus interest rate that lasts just one year.
Tesco Bank Internet Saver pays 0.55 percent, but that drops to 0.1 percent after 12 months. Leeds BS last week raised its rate on its limited issue online access account to 0.6 percent.
But the account runs only till November 2022, after which your money is transferred to a separate account, which can pay at least 0.15 per cent at the current rates.
The best simple savings accounts come from Charter Savings Bank at 0.6 percent (available online and via post) and 0.58 percent from Investec.
Marcus at 0.6 percent also includes a bonus, but you’ll continue to earn a competitive rate of at least 0.5 percent if it disappears after one year.
Small print fixed-rate bonds can also trap savers. Aldermore, often among the best payers, gives customers only 14 days after opening it to add money to their account.
This period starts from the time you make your first deposit, not when you opened the account.
With Paragon you have 28 days, while Charter Savings Bank gives you 14 days to apply online, or 30 days to a postal account.
Some providers either transfer your money to a poorly paying easy-to-access account or put it back into your current account at the end of the term.
Others, including National Savings and Investments, Aldermore, Ford Money and Skipton Building Society, reinvest it for another period, unless you tell them not to.
This is particularly worrisome for holders of NS&I Guaranteed Growth Bonds, where rates have been fixed at 0.1 per cent for one year, rising to just 0.55 per cent for five years.