Easy-access savings accounts come with increasingly restrictive conditions

Published by Sylvia Morris on 14 November 2018.
Last updated on 14 November 2018

Terms and conditions

Easy-access accounts are often assumed to be straightforward, but savers should study the terms and conditions.

Savers desperate for top rates on their easy-access savings have snapped up the 1.5% Marcus account on offer from the mighty Goldman Sachs. In the first 40 days after its launch in late September, it had clocked up no fewer than 100,000 customers.

But, like a growing number of top-paying deals, it comes with a twist. The rate includes a 0.15 percentage point bonus paid for the first 12 months.

However, unlike some other accounts, you continue to earn a decent – if not top – rate once the bonus disappears; and Goldman Sachs says that you can renew the bonus after the first year simply by clicking a button on the website.

Its arrival has spurred on other providers to offer better rates. However, seven out of 10 of the best rates come with catches, such as a short-term bonus or restrictions on when you can take money out, and even put it in.

Check what you are getting into

Charlotte Nelson, finance expert at data monitor Moneyfacts, says: “Many savers naturally assume easy-access accounts are straightforward, but an increasing number come with restrictions."

She adds: “There is nothing wrong with these accounts, but savers should look closely at the terms and conditions, so they know what they are getting into.”

Next in line after the Marcus account is Bank of Cyprus UK Online Easy Access at 1.47%, with a bonus of 0.47 percentage points for a year. Then comes Family Building Society's Premium Saver at 1.45%, which lets you put money in only until 7 December.

Virgin Money's Double Take E-Saver and Tesco Internet Saver both pay 1.42%. With the Virgin account, you can make only two withdrawals in a calendar year. Once you’ve made them, you have no access to your money at all until the next calendar year.

Tesco Bank includes a big bonus of 0.87 percentage points paid for the first 12 months, after which you earn 0.55%.

Sainsbury’s Bank Defined Access Saver at 1.4% limits you to three withdrawals a year, while the 1.38% from Post Office Online Saver lasts only 12 months, after which the rate plummets to 0.25%.

The top rate with no restrictions is 1.4% available from three providers (see Star Buys below).

Meanwhile, 507,000 savers with the state-backed National Savings & Investments (NS&I) will see the returns on their inflation-linked accounts cut from next year.

At present, the interest rate on these accounts is linked to inflation as measured by the retail prices index, which at the time of writing shows inflation running at 3.3% a year. However, from 1 May next year, it will switch to the lower consumer prices index, currently 2.4%.

NS&I’s index-linked accounts were withdrawn from sale in 2011, but those who already hold them can roll over their cash into new accounts each year. The change will be applied to all savings certificates that mature on and after 1 May. Current certificates will remain unchanged until they are due to be renewed.

Ian Ackerley, NS&I chief executive, says: “[Holders of] index-linked savings certificates will continue to benefit from a unique and attractive product, which remains an important part of our product range.”

Star Buys

Ford Money Fixed Saver 1 year

  • 2.00% Gross*/AER* Annual (Fixed)
  • Minimum deposit £500, maximum balance £2,000,000
  • Our Best Rate Guarantee

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