Watch out for small print traps

Daily Mail - - Money Mail - By Sylvia Mor­ris

SAVERS need to be quick to take ad­van­tage of top-pay­ing rates on of­fer — but they must also be sure to sift through the small print.

West Bromwich Build­ing So­ci­ety closed its WebSave Bonus af­ter it had been on sale for just four weeks. But it is one of many new ac­counts with in­creas­ingly com­pli­cated terms and con­di­tions.

Some ac­counts now of­fer more than 2.75 pc be­fore tax with easy ac­cess — well above the 0.5 pc Bank of Eng­land base rate. This is also more than is of­fered on most one-year fixe­drate bonds where your money is tied up.

Un­able to at­tract new savers with their ex­ist­ing ac­counts — which can pay as lit­tle as 0.008 pc af­ter tax (0.01 pc be­fore) — banks and build­ing so­ci­eties are of­fer­ing big bonuses to new savers.

The av­er­age bonus is more than three times base rate, at 1.66 per­cent­age points be­fore tax, says Mon­ey­su­per­mar­ket.com, and nine out of the ten top easy ac­cess ac­counts come with a bonus.

But to en­sure they can come out with head­line rates, mar­ket­ing men have de­vel­oped a se­ries of new tricks such as vari­able, rather than fixe­drate, bonuses and re­stricted ac­cess to ac­counts even though they are classed as easy ac­cess.

It makes it all the more dif­fi­cult for savers to find an ac­count which suits their needs. And it’s set to con­tinue.

Last week Adrian Coles, di­rec­tor-gen­eral of the Build­ing So­ci­eties As­so­ci­a­tion, said: ‘Main­tain­ing pos­i­tive in­flows will re­main a chal­lenge while the bank rate re­mains low, as savers may seek higher re­turns else­where or opt to re­pay debt.’

Oth­ers with top-pay­ing in­ter­net ac­counts in­clude Egg and Al­liance & Le­ices­ter, which both come with a big bonus.

If you sign up to an ac­count which comes with a bonus, make sure you move your money when it runs out.

And if you opened a top-pay­ing ac­count over a year ago, check the rate. Its name might be sim­i­lar to those now show­ing head­line rates, but you will be earn­ing much less. For in­stance, the AA In­ter­net Sav­ings Ac­count, closed to new savers, pays 0.08 pc (0.1 pc), but AA In­ter­net Ex­tra 3 pays 2.24 pc (2.8 pc) in­clud­ing the bonus.

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