Research by Moneycomms and commissioned by savings app Spring found that only 10 of the 56 easy-access accounts offered by the UK’s 17 leading current account providers were classed as ‘pure’ easy access, with no limits, fees or restrictions.
Analysts found that 46 out of 56 easy-access savings accounts offered by UK’s leading current account providers have some form of restriction.
More than a third of accounts offer tiered rates, while three in 10 restricted withdrawals. About 16% of easy-access accounts were only available on fee-paying accounts, while 9% had a bonus built into the headline rate.
Savings accounts offered by current account providers dominate the savings market. Recent analysis by the Financial Conduct Authority (FCA) found that 76% of adults with a savings account held the account with their main or sole current account provider.
Derek Sprawling, Spring’s managing director of savings, said: “Over three-quarters of adults with savings hold that money in an account offered by their current account provider, but they are suffering from poor choice and a myriad of restrictions, either sacrificing access to their money, seeing the rate drop if they save above a certain amount or only generating a decent return if they hold a significant balance.
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“Given the restrictions on these accounts, it’s no surprise there is a significant amount of cash languishing in accounts offering a poor rate of return.”
Andrew Hagger, personal finance expert at Moneycomms, said: “The majority of easy-access savings products from the main banks are not straightforward and have unhelpful ‘strings’ attached. If you ask most people, they just want a decent rate of return without having to worry about remembering confusing terms and conditions. They want to be able to get their hands on their cash whenever they need it.
“Too many customers have money sitting in high street bank current accounts offering poor value or complicated linked savings accounts paying miserly returns. Opening a separate savings account (even a different brand) and using it as a bolt-on to their existing bank account can get them a ‘no-strings’ savings account paying a far better return than they receive at present.
“With the advent of open banking, there’s no need to switch current account as the task of moving money from current account to a new savings app and vice versa is simple and more painless than people realise.”
Related: Have you fallen into the current account savings trap?
