21% of easy access accounts restrict withdrawals

Category: Savings
Author: Leanne Macardle
Date: 01/05/2018

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:

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