Hidden catches on top accounts
SAVERS face an array of hidden catches on accounts that are supposed to be easy-access.
Some banks will let you access your money only twice a year without paying a penalty. Others are bolstering rates with a large shortterm bonus, which means savers are left earning next to nothing after 12 months unless they switch again.
Even if savers jump through these hoops, they end up with little or no more interest than if they had just picked a straightforward easy-access deal.
Virgin Money’s Double Take E-Saver at 1.3 pc limits you to two withdrawals a year, and closing your account counts as a withdrawal. So if you take out cash twice, you won’t have access to the remainder of your money until the following year.
Sainsbury’s Bank Defined Access Saver, which also pays 1.3 pc, allows savers three withdrawals a year. You can make more, but your rate will drop to 0.5 pc. Coventry BS Limited Access Saver again pays 1.3 pc and restricts the number of withdrawals to three a year. Exceed this limit and you’ll be charged a fee equivalent to 50 days’ interest.
Coventry’s 1.3 pc rate also includes a 0.3point bonus for 12 months. After this, the rate drops to 1 pc.
Post Office Money’s latest edition of its Online Saver Issue 31 pays 1.33 pc to new savers. But this top rate includes a 1.08 percentage-point bonus.
After a year, the bonus vanishes and you end up with a rate of just 0.25 pc. Some savers in older versions of the same account already earn this pittance.
For many, the hassle of having to move your cash after 12 months just won’t be worth it.
With the Post Office Money account you’ll earn only 30p extra interest on each £1,000 than if you went for a top simple account.
Both the RCI Bank Freedom Account and Shawbrook Bank Easy Access Account at 1.3 pc are simple savings accounts with no bonus and no limit to the number of withdrawals you can make.
The AA Member Saver, open to the 3.3 million members of the motoring club, is also a simple account. Its rate went up to 1.3 pc on Monday, but only for new savers.
In the past, when RCI has raised its rate it has given its new higher rate to both new and existing savers.
Shawbrook, on the other hand, tends to bring out a new issue of the same account and only pays the higher rate to new savers. Its current issue, number 12, pays 1.3 pc, but some savers in previous issues earn just 0.75 pc.
Ford Money Flexible Saver pays a lower 1.22 pc, but pledges that when it alters its rates, the new deal applies to new and existing savers.
You’ll earn £1.10 less interest for the year on each £1,000 than in the top 1.33 pc with Post Office Money.