How easy are ‘easy-access’ accounts? Beware the top-paying deals that come with costly catches
Savers should watch out for top-paying accounts that come with costly catches.
Some so-called easy-access accounts with market-leading rates in fact have strict rules around when customers can make withdrawals — and even deposits.
And those with fixed-rate bonds risk not being able to access their money at the end of the term if they fail to tell their bank they do not want it rolled over.
The amount of cash held in easy-access deals jumped by £179 billion during the pandemic to a huge £958 billion.
Hidden catches: Some so-called easy-access accounts with market-leading rates in fact have strict rules around when customers can make withdrawals – and even deposits
But despite what the name suggests, many deals do not allow savers to dip into their accounts whenever they like.
And if you make too many withdrawals, your rate can plummet to as low as 0.1 per cent or you could even be charged a fee.
Coventry Building Society’s new Four Access account pays a top 0.65 per cent and allows savers to take out money four times a year.
If you make more there is a charge amounting to 50 days’ interest — which works out at £4.45 for a £5,000 withdrawal.
Aldermore Double Access, which pays 0.6 per cent, permits just two withdrawals a year.
After this, your rate will drop to 0.1 per cent. Meanwhile, Family BS Premier Saver, which also pays a top 0.65 per cent, gives savers only a few weeks to deposit cash.
After its November 3 deadline you can’t put any more in.
Other deals include a bonus interest rate which lasts for just one year.
Tesco Bank Internet Saver pays 0.55 per cent, but this drops to 0.1 per cent after 12 months. Leeds BS upped its rate on its Limited Issue Online Access account to 0.6 per cent last week.
But the account runs only until November 2022, after which your money is moved into a different account, which could pay as little as 0.15 per cent at current rates.
The best simple savings accounts come from Charter Savings Bank at 0.6 per cent (available online and through the post) and Investec at 0.58 per cent.
Marcus at 0.6 per cent also includes a bonus but you will at least continue to earn a competitive rate of 0.5 per cent when it disappears after a year.
Savers can also be tripped up by fixed-rate bond small print. Aldermore, often among the best payers, gives customers only 14 days to add money to their account after opening it.
The term then starts from when you make your first deposit, not from when you opened the account.
With Paragon you have 28 days, while Charter Savings Bank gives you 14 days if you apply online or 30 days on a postal account.
Some providers dump your money into a poor-paying easy-access account at the end of the term or put it back in your current account.
Others, including National Savings & Investments, Aldermore, Ford Money and Skipton Building Society, reinvest it for another term unless you tell them not to.
This is particularly worrying for NS&I Guaranteed Growth Bond holders where the rates are a miserly 0.1 per cent fixed for one year, rising to just 0.55 per cent for five years.