AVOID TRAPS THAT CAN RUIN YOUR PAYOUT

BEWARE the sneaky traps banks use when you are searching for a new home for your savings. These are little loopholes in the terms and conditions that can cause your rate to plummet seemingly for no reason, or that punish you for withdrawing cash too many times in a year.

A classic trick is the bonus trap. This is where they pay you a stonking interest rate for the first year but a pittance after that.

Banks hope you won’t get round to switching to a rival and languish on a low rate.

If you put money into a fixed-rate bond, watch out for the dreaded roll-over clause.

This is where your money is automatically moved into a similar account when your bond comes to an end.

Often, the new deal will pay substantially less than you got before.

And unless you act fast, you’ll be tied into the lower return for years.

So make sure that you keep a record of when your bond matures and exactly what happens to your money

when it does. When you put your money into an easy access account, you can be forgiven for thinking you can get at your cash whenever you want.

But this isn’t always the case. Nowadays, many banks limit how many withdrawals you can make —sometimes to as few as just one a year.

If you make any more than the permitted number, your interest rate can be slashed to almost nothing.

Always check the small print before signing up.

With a fixed-rate bond, your money is typically locked away for the length of the deal.

If you want to withdraw money earlier, you’ll usually have to pay dearly for it. With some savings providers, this can be up to half a year’s interest.

If you think you might need access to it earlier than expected, stick to variable easy access accounts.