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Are Instant Access Savings Accounts Always What They Seem?

Are Instant Access Savings Accounts Always What They Seem?

Category: Savings

Updated: 31/10/2008
First Published: 06/05/2008

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 It is now over 6 months old so the content may be out of date.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 most popular savings account amongst savers are instant access and no notice. The majority of savers like the comfort of knowing that if they require immediate access to their money, they can get it. But with some savings accounts this comes at a price.

Most instant access and no notice savings accounts allow you to access your money as and when you want it. But on almost a quarter of savings accounts there are some strings to be wary of when making withdrawals. Some savings accounts either reduce or pay no interest in the month a withdrawal is made, while others allow only a set number of withdrawals a year. One lender Leeds BS will actually close your savings account if you make more than two withdrawals each year on its Premium Access and Postal Max savings accounts.

Some of these savings accounts pay market-leading rates but just by making a few withdrawals a year, you could lose out on hundreds of pounds of interest. The Britannia BS Homesaver savings account is aimed at those looking to save a deposit to buy a house. If you needed to access your money and made 5 withdrawals a year on a balance of £10000 you would of lost £563.72 in interest.

Thankfully most savings institutions have savings products which don't have penalties for making withdrawals and still pay a high rate on interest. Birmingham Midshires e-Saver pays 6.50% and Anglo Irish Bank Easy Access Deposit pays 6.05%.

Savers need to make sure they check the terms and conditions before signing up for any savings account. Make sure the account thoroughly suits your needs, otherwise you could see yourself substantially out of pocket just for accessing your own money.

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 Any products featured may be withdrawn by their provider or changed at any time.

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