21% of easy access accounts restrict withdrawals - Savings - News - Moneyfacts

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

21% of easy access accounts restrict withdrawals

21% of easy access accounts restrict withdrawals

Category: Savings

Updated: 15/03/2016
First Published: 22/02/2016

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The savings market continues to suffer from record low rates, making it even harder for savers to find a good deal. However, it isn't just good rates that savers are struggling to seize, with our latest research highlighting a worrying trend in withdrawal restrictions, making it even more difficult for savers to find an account that meets their needs.

The data shows that, out of all the so-called easy access savings accounts available to new customers, 21% now restrict withdrawals. Worse still, half of the top 10 best rates impose some kind of withdrawal limit, meaning it's now harder to source a top-paying account that offers true easy access.

Unexpected findings

The fact that so many easy access savings accounts now have restrictions may come as a surprise, as it's often assumed that they offer unlimited access. 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.

Below is an overview of the top easy access accounts currently on the market, together with any accompanying restrictions, and as you can see, a truly easy access deal is becoming increasingly difficult to come by:

Provider Account % Gross Min inv 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
Compiled 22.02.16

It's particularly interesting to note the fact that the best buy charts are dominated by challenger banks and building societies, all lesser-known names that are giving the high street banks a run for their money in the savings stakes. Given the state of the market at present, it's perhaps no wonder that so many people are turning to these smaller names, but there are concerns that even these providers may not be able to offer the ideal combination of flexibility and high rates for much longer.

Rachel Springall, finance expert at Moneyfacts, said that savers are faced with a "frustrating combination", with interest rates at record lows and competition remaining 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, which is why it's so important to compare accounts thoroughly.

"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," cautioned Rachel. "It would also be a good idea to check the compensation rules, as a growing number of providers in this sector's best buys operate under European compensation schemes, rather than the UK's FSCS."

And, if you're still disappointed with the deals on offer, why not 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," said Rachel. Challenger banks should also be given worthy consideration, particularly given how prominent they are in the charts, but you'll still need to be quick to grab the best deals.

Ultimately, however, the future isn't looking bright, as Rachel concludes: "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."

What next?

Boost your chances of securing a decent rate by comparing savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Just 44 savings accounts beat inflation

Inflation recorded another large jump during December, and predictably, this has had a devastating impact on the number of savings accounts that beat it, so much so that you’ll need to lock your money away if you want an inflation-beating return.

Just 47% have money in a savings account

We’re often told of the importance of saving, yet unfortunately, the message doesn’t always get through. Indeed, research shows that just 47% of those surveyed have money in a savings account, and 17% have no savings or investment whatsoever.

How much will you save this year?

Many of us have set savings goals for the year ahead, and planning to budget better and save more will be at the top of many financial resolution lists. But how much are you hoping to squirrel away? Encouragingly, many people have impressive targets.
 
Close