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The easy access accounts that come with conditions

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Written by: Paloma Kubiak
05/11/2018
Easy access accounts are typically ‘no strings attached’ products but research reveals around a third of the market come with a catch.

Savers have warmed to easy access accounts in recent times as they’ve offered highly competitive rates without having to tie up money for an extended period of time.

But research from independent data site Moneyfacts revealed that the number of easy access accounts with either a withdrawal restriction or a time-limited bonus amount are on the rise.

In fact, nearly a third of the market (32%) comes with one of these restrictions.

As an example, top paying Marcus by Goldman Sachs pays 1.5% interest on its easy access account but the rate includes a bonus of 0.15% paid for 12 months so after this time, savers will receive 1.35%.

The Bank of Cyprus UK offers 1.47% but again this is a bonus account. After 12 months, the rate reverts to 1%.

Another easy access account within the best buy tables is the Virgin Money double take eSaver which pays 1.42%. However, it only allows to withdrawals in a calendar year, one of which is for closure.

Just one of the top five easy access accounts comes with no conditions – the Family Building Society’s premium saver paying 1.45%. However, it comes with a higher deposit amount at £5,000.

‘Worrying trend’

Charlotte Nelson, finance expert at Moneyfacts, said many savers would assume not only that easy access means unlimited access to their funds, but that these are simple to understand products.

She said: “This couldn’t be further from the case, with six of the top 10 highest rates having some kind of condition attached.

“The trend of limiting the number of withdrawals on easy access accounts is worrying. In fact, two years ago just 14% of the easy access market had accounts that limited access, which has increased by 8% to stand at 22% today.

“These statistics show that providers are carefully thinking about how much money they can handle, and are choosing to put limitations in place so they don’t end up having to pay out too much over the long-term. While there is nothing wrong with these accounts, the clauses they contain rely on savers being on top of their finances, either knowing when the bonus expires or how many times they require access to their cash.”

Nelson added that savers considering these easy access accounts need to look carefully at the terms and conditions.

“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 don’t face a drop in rate or a penalty,” she said.

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