Complicated Terms and Conditions in Easy Access Savings Accounts

Strategic Insights -

Banks in the UK have been offering easy access savings accounts with complicated terms and conditions that could cause savers to lose out on interest. An analysis of 56 easy access accounts from 18 of the biggest banks found that 46 have some kind of restriction. Nearly 10% of these accounts include a bonus rate that will be cut after an introductory period, while more than a third have tiered interest rates that change based on the account balance. Another 30% allow for a limited number of withdrawals, and nearly a third of these accounts have restrictions that kick in after a certain number of withdrawals.

Key Takeaways:

  • Of the 56 easy access accounts analyzed, 46 have some kind of restriction that could affect the saver's interest rate.
  • More than a third of these accounts (36.6%) have tiered interest rates that rise or fall depending on the account balance.
  • One in three accounts (30.4%) have a limited number of withdrawals before the interest rate changes or restrictions kick in.
  • Nearly 10% of accounts (9.4%) include a bonus rate that will be cut after an introductory period, meaning that savers who fail to move their money will earn less.
  • Some accounts have restrictions that kick in after a certain number of withdrawals, such as four withdrawals (mentioned by James Blower).
  • Savers who are able to manage their money closely and take advantage of competitive rates can find good deals, but the majority of easy access savings products have unhelpful strings attached (Andrew Hagger, Moneycomms).

Statistics:

  • 46 out of 56 easy access accounts have some kind of restriction (82.1%).
  • 36.6% of accounts have tiered interest rates.
  • 30.4% of accounts allow for a limited number of withdrawals.
  • 9.4% of accounts include a bonus rate that will be cut after an introductory period.
  • The average interest rate offered across pure easy access accounts was 2.04% in the first week of June.
  • The average interest rate offered by the big five banks fell to 1.24% in the first week of June (Spring research).

Sources:

  • Spring savings app analysis of 56 easy access accounts from 18 of the biggest banks in the UK.
  • Interview with Derek Sprawling, managing director of savings at Spring.
  • Interview with Andrew Hagger, of Moneycomms.
  • Interview with James Blower, of comparison website Savings Guru.
  • UK Finance spokesman's statement.
  • Research by Spring found (date: not specified).
  • Data from the first week of June 2024 (exact date not specified).
  • "Revealed: the best savings accounts on the market right now" article (date: not specified).
  • "Treasury Committee tells chief executives of some of the largest high street banks to justify whether their savings offerings were giving fair value to savers" article (2023).