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Providers helping savers resist temptation

Providers helping savers resist temptation

Category: Savings

Updated: 31/07/2009
First Published: 31/07/2009

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 It is now over 6 months old so the content may be out of date.

Consumers tempted to dip into their savings are being given a helping hand from lenders, as an increasing number are launching accounts that restrict the number of cash withdrawals.

Research conducted by Moneyfacts has recorded a marked increase in the number of such products at a time when mid-season sales are rife on high streets up and down the country.

In July alone, Bank of Scotland, Coventry BS, Halifax, Lloyds TSB, Royal Bank of Scotland and West Bromwich BS all launched accounts that put restrictions on the number of withdrawals that the holder can make.

Should that limit be broken, a drop of interest on funds is incurred. For example, Lloyds TSB's Incentive Saver is a 12 month fixed term variable rate account that pays interest of three per cent. However, for each month there is a withdrawal, interest is lost on the full balance for that month.

"Customers should consider carefully whether the funds are needed. If they really wish to save and can limit their withdrawals, there are many new options on the market," said Darren Cook, spokesperson for Moneyfacts.co.uk.

"Whilst many of these accounts are lower than the current competitive fixed rate market, these accounts have the option of allowing further additions and notice does not necessarily need to be given, although sometimes at a penalty.

"This should give the consumer peace of mind should the funds be required or if a more competitive deal appears on the market."

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 Any products featured may be withdrawn by their provider or changed at any time.

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