22nd February 2016
Savers are continuing to get a raw deal, as new research shows that not only are they enduring record low rates but out of the easy access savings accounts available to new customers, 21% now restrict withdrawals.
Worse still, the study from Moneyfacts.co.uk, found half of the top 10 best rates impose some kind of withdrawal limit.
The fact that so many easy access savings accounts now have restrictions may come as a surprise as it is often assumed that they offer unlimited access said Moneyfacts.co.uk.
Savers looking at account details may therefore be confused when a limit is discovered, which could give them cold feet and cause them to turn away from the best rates.
It’s perhaps unsurprising that given the current state of the savings market savers are turning to smaller, regional building societies to furnish them with the flexibility and interest they desire.
However, there are concerns that some of these providers are struggling to stick to their principles of offering a good rate because they’re being inundated with savers.
Rachel Springall, Finance Expert at Moneyfacts.co.uk, said: “Savers are faced with a frustrating situation; interest rates are at record lows and competition remains lacklustre. As a result, those looking for a true easy access savings account may be finding it difficult to secure one that suits their needs.
“Anyone looking for this kind of deal needs to cast a keen eye over the account details, as not all restrictive accounts will have ‘limited access’ clearly displayed in their title. It would also be a good idea to check the compensation rules as a growing number of providers in this sector’s Best Buys are passporting into the UK.”
However savers could investigate alternatives. High interest current accounts have been dominating the headlines with lucrative credit interest rates, with some even offering exclusive savings deals that sit alongside the account.
Springall added: “Another option is to invest with challenger banks, which seem to have a greater appetite for savers’ cash, but even these deals are not immune to cuts so savers need to be quick to grab the best deals. No matter which route savers decide to go down, one thing is clear: the savings market is not going to re-energise anytime soon, which means it’s only going to become more difficult to get a decent return.”
|Best Easy Access Account||%||Min||Notes|
|RCI Bank UK||Freedom Savings Account||1.55%||£100||Unlimited withdrawals|
|ICICI Bank UK||SuperSaver Savings||1.39%||£1||Unlimited withdrawals|
|Virgin Money||Defined Access Saver||1.31%||£1||3 withdrawals per year|
|Shawbrook Bank||Easy Access||1.30%||£1,000||Unlimited withdrawals|
|National Counties BS||3rd Issue Branch Saver||1.26%||£1||£300 max w/d per day|
|Skipton BS||eSaver||1.25%||£1||Unlimited withdrawals|
|West Brom BS||Limited Access Saver||1.25%||£1||6 withdrawals per year|
|National Savings & Investments||Income Bonds||1.25%||£500||Unlimited withdrawals|
|United Bank UK||Online Easy Access||1.25%||£500||1 withdrawal per month|
|West Brom BS||Direct Limited Access||1.25%||£1,000||6 withdrawals per year|
Source: www.moneyfacts.co.uk 22.2.16