The Daily Telegraph - Your Money

Half of top-paying easy-access accounts come with a catch

- Will Kirkman

Banks are increasing­ly attaching restrictiv­e small print to savings accounts, potentiall­y locking savers into unsuitable deals without their knowledge.

Just over half of the top 50 easyaccess accounts come without any strings attached, according to research from Investec and analyst MoneyComms. However, the remainder have a variety of restrictiv­e terms, including limitation­s on withdrawin­g money and short-term bonuses that inflate returns for a limited time but are quickly removed.

With savings rates at historic lows, these hidden conditions can allow deals to appear competitiv­e while limiting savers’ options.

There are fears customers are opening accounts based only on the interest rate without reading the small print.

Andrew Hagger of MoneyComms said: “Most savers don’t want to have to worry about a limited number of withdrawal­s or access penalties, they simply want an account they can pay into and withdraw from whenever they like with no strings attached and no sneaky terms and conditions.”

More than a third of the top 50 accounts limit the number of withdrawal­s a customer can make, while more than one in five charge interest penalties to savers who make more withdrawal­s than their accounts allow.

Four of the top 50 accounts carry bonuses, which inflate the interest rate for a short time before dropping to a less competitiv­e level. The average size of this bonus was 0.26pc, and on average they last for 12 months.

Samantha Booysen of Investec said:

“It is just as important to review an account’s terms and conditions as it is the interest rate they are paying. You need a savings account that not only pays an attractive return but also allows you to manage your money in the way you want.” Banks and building societies are increasing­ly coming up with new ways to attract customers after the drop in rates. Research from analysts Moneyfacts found that current account providers were offering customers various incentives to switch. HSBC offers savers £125 to switch to its current account, while Santander offers cashback on household bills. Virgin Money offers a free case of wine for those who switch using the Current Account Switch Service.

One of the first shopkeeper­s in Britain to install a Bitcoin ATM said he removed the machine after he suspected criminal gangs were using the digital currency to scam pensioners.

Paul Cheema, 47, made local headlines in 2018 when he began allowing customers to trade and cash out Bitcoin from his corner shop in Coventry.

But he was forced to get rid of the “digital currency cash machine” after two years, as the type of people coming into the shop to use it gave him increasing cause for alarm. “Some of the people were quite intimidati­ng and you had no idea what they were using it for,” he said.

He suspected one elderly woman had been “catfished” – when someone is lured into a relationsh­ip online and conned out of their savings.

“She kept coming in every day to pay £200 into the machine to send to someone in America she said she had met online. We tried to tell her.”

That was the watershed moment, Mr Cheema said. “We have a duty to protect the people in our community.”

New regulation­s aim to stop Bitcoin machines being used as conduits for money laundering

Enhanced “know your customer” ID checks came into force at the start of the year and aim to clamp down on money launderers abusing the machines. Before, untraceabl­e Bitcoin holdings could be converted into cash without scrutiny.

The number of Bitcoin machines in Britain now stands at 226, according to tracker website Coin ATM Radar. The machines charge hefty usage fees of up to £10 per transactio­n and shopkeeper­s earn a rent from the supplier for putting them in their stores.

Rav Garcha, 39, another shopkeeper from Birmingham, has two Bitcoin ATMs in his stores and a card machine that allows customers to pay for items in Bitcoin directly at the till.

“We have had some ne’er- do-wells coming into the shop to use it but we have not had any issues,” he said.

Both men believe cash is on the way out. Mr Cheema said: “We want as little cash as possible going through the business to reduce risk. We have been robbed a couple of times.”

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