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How to spot a savings trick from a savings treat

How to spot a savings trick from a savings treat

Category: Savings

Updated: 31/10/2012
First Published: 31/10/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
They say that the devil is in the detail and nowhere is this truer than the savings market where savings tricks and savings treats often sit side-by-side. Whilst sudden falls in your rate of interest may not be quite as scary as some of your visitors on Halloween, they can still give customers a real fright.

Savings providers can reduce variable rates offered on their products at any time, so if you're in the process of applying for a new savings account, be sure to check the rate right up until completion.

The chilling truth is that there are savings products that include both Treats and Tricks.

Treat: Nationwide's MySave Online Plus product has a market leading variable monthly rate of 2.50% AER (2.47% Gross) including a bonus of 0.97% for twelve months.

The MySave Online Plus account from Nationwide is ideal if you want to save for holidays and rainy days.

You can transfer money into your account whenever you want and have access to your savings with one free withdrawal each year, with the flexibility for additional withdrawals if you need them.

Trick: Where additional withdrawals are made from a MySave Online Plus account, a loss of 0.7% introductory bonus will be incurred in the month of withdrawal. The following month you will revert back to the full interest rate and bonus (where applicable) provided you make no further withdrawals.

Make sure you make a note in your diary to change as soon as the bonus rate ends to ensure you still get the best savings rate on the market.

Treat: The ING Direct Savings account pays a rate of 2.50% AER (2.47% gross) variable including a 12 month bonus of 1.97%, with a minimum investment of just £1.

Trick: ING Direct bank operates in the UK under the European Economic Area (EEA) 'passport' scheme. This means that your savings will be protected by the depositor protection scheme in the country the bank is licenced, and not the UK scheme. The first €100,000 (or sterling equivalent) per person, per European banking licence is protected under the Dutch Central Bank's Deposit Guarantee Scheme. Also make sure you make a note in your diary to change as soon as the ING Direct bonus rate ends. The end of the bonus period often means the death knell for accounts' time as market leaders.

Treat: The following accounts; Norwich and Peterborough e-Saver (Issue5) 2.50%, the Saffron e-saver (issue 6) 2.50% and the Allied Irish Bank (GB) Easy Access Account Issue 3 at 2.50% offer no bonus, so what you see is what you get.

Trick: They are all variable rates so you will need to keep an eye out in case they go up as well as down.

Treat: If you can bear to part with your money for a whole year, topping our 1 year fixed rate bond chart is the FirstSave1 Year Fixed Rate Bond 22 at 3.00% AER, which can be opened with just a £1,000 minimum deposit and up to £2,000,000 maximum deposit.

Trick: You need to lock your money away for 12 months (no withdrawals). FirstSave is owned by First Bank of Nigeria but is protected under the UK Depositors protection scheme, so the first £85,000 per person, per UK banking licence, is protected by the Financial Services Compensation Scheme (FSCS).

As an alternative, the Allied Irish Bank (GB) Fixed Rate Bond at 2.80% AER can be opened with just a £1,000 minimum deposit and up to £2,000,000 maximum deposit. This deal is protected under the UK Depositors protection scheme. Allied Irish Bank shares its £85,000 compensation limit with First Trust Bank (Northern Ireland).

For treats aplenty, be sure to check out the Best Savings Rates with Best Buy tables.

With our impartiality set in stone and all terms and conditions clearly laid out, you can be sure you're entering a trick free zone.

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.