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Easy access accounts have seen some very welcome increases lately, thanks in large part to new bank Marcus by Goldman Sachs, which has pushed the rest of the market up alongside it. However, not all of these accounts may be as 'easy' as they seem, as 32% of the easy access market now has some restriction on it.
This marks an increase from May's 29% of accounts that came with a bonus, withdrawal restrictions or a stipulation that saw the deal change into a different product after a set time. "Many savers would assume not only that easy access means unlimited access to their funds, but also that these accounts are no-frills and simple to understand," commented Charlotte Nelson, finance expert at Moneyfacts.co.uk. "However, this couldn't be further from the case, with six of the top 10 highest rates having some kind of condition attached."
|Percentage of easy access market with restrictions*||23%||27%||29%||32%|
While it may not be a problem to accept an account with a bonus, or one that turns into another deal after a while – as the variable nature of these products means you'll probably want to review your rate after a year anyway – it's worrying that more accounts are now limiting the number of withdrawals. Indeed, according to Charlotte, "two years ago just 14% of the easy access market had accounts that limited access, but this has increased by 8% to stand at 22% today."
A limit in the number of withdrawals seems to go against the supposed easy access nature of these accounts, but Charlotte explained that it's because some providers want to keep a close eye on their money flow. There's nothing wrong with these accounts, they just require some more active management.
If you're not sure how much access you're going to need, an account with withdrawal restrictions won't be for you, no matter what it pays. If, however, you're choosing an easy access account just in case of emergency, these accounts shouldn't be dismissed out of hand – as long as they pay a top return.
"Although easy access accounts with restrictions often tend to pay higher rates, any saver considering them as an option would be wise to look at all the terms and conditions, so they know exactly what they are getting themselves into," said Charlotte. "Once the account is open, making a note of any bonus expiry dates in a calendar and how many withdrawals have been made will ensure you do not face a drop in rate or a penalty."
That said, there have been instances of easy access accounts with no restrictions and top returns storming the market. These accounts tend to disappear as quickly as they appear, with the provider often getting inundated with sign-ups. That's why, if you really want an account that is truly easy, you'll have to act fast.
"When rates are low, finding a savings account can be hard enough without all the added complications, particularly when savers naturally assume these easy access accounts are straightforward," Charlotte concluded. "However, there are some deals that remain simple, so savers will need shop around to ensure they get the best deal for them."
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