The sneaky traps on top accounts
SAVERS tempted by easy-access accounts offering top rates should watch out for hidden catches.
Since Goldman Sachs launched its Marcus account paying 1.5 pc last month, High Street banking giants Royal Bank of Scotland and NatWest have launched accounts advertising the same rate.
But while the Marcus account is a straightforward easy-access account where you can put money in and take it out whenever you want, the others are not. Make one mistake and your interest rate could plummet.
With the Marcus account, the only main drawback is that the rate includes a small bonus of 0.15 percentage points payable for the first 12 months — but the bank says you can renew it at the end of your first year.
Another disadvantage for some is you must disclose your salary, occupation and a mobile phone number when opening an account.
With the RBS and NatWest accounts the most you can hold in the accounts, called Savings Builder, is £10,000, compared with £250,000 in the Marcus account.
On anything over this you will earn just 0.2 pc — the same miserly rate RBS and NatWest pay on their Instant Saver accounts.
To earn the 1.5 pc on balances up to £10,000 you must also ‘grow’ your savings balance by at least £50 a month. In any month you fail to do so, you won’t earn a penny in interest.
And if you make a withdrawal in any month you must then pay in even more to ensure you don’t lose out. For example, if you deposit £100 and take out £70 in the same month, the bank will say your savings have only grown by £30 and refuse to pay any interest.
The headline 1.5 pc rate works out at roughly 0.125 pc a month. So if you miss out on one month your annual rate will fall to 1.31 pc. Miss two months and your rate will end up as 1.25 pc. And be sure to note the bank’s ‘monthly cycle’. Rather than a straight calendar month, the account runs from the end of the second-last business day of one month to close of business on the same day the following month.
So, for example, the final month of the year would run November 29 to December 28. The accounts are also only available to those who have their current account with the banks.
If you want to avoid any confusion there are plenty of other accounts which come close to matching the top 1.5 pc rate and let you put money in and take it out as you like.
The new eSaver from Nottingham BS pays an even 1.55 pc.
In addition to Marcus by Goldman Sachs which offers 1.5 pc, Shawbrook Bank Easy Access 14 and Charter Savings Bank Easy Access 10 both pay 1.4 pc.
Virgin Money Regular Savings, available through its branches, pays a fixed 3 pc on savings between £1 and £250 a month. You can dip into your savings without losing interest.