How easy access savings accounts could cost you more when you withdraw ...Middle East

Easy access accounts – which allow you to deposit and withdraw money when you need it – are popular due to their flexibility.

Some, for example, offer a top headline rate which falls if you withdraw your money.

“Despite being called easy access, that just means savers can access their money when they want, but these accounts can still limit the number of times someone can take out their cash.”

It is down to the account holder to review it and switch their pots when their bonus expires, though, which can see the rate nosedive.

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“The rates offered on easy-access accounts are variable and usually get cut in response to Bank of England base rate reductions.

Chase has a 2.25 per cent bonus for 12 months with a Boosted Rate deal, where you will get 5 per cent.

Atom Bank also offers a rate of 4.75 per cent, which falls to 2.5 per cent in months that you withdraw.

Last week, the Bank voted to hold interest rates at 4.25 per cent. Six members of the Bank’s Monetary Policy Committee (MPC) voted to keep rates on hold, while three supported a reduction to 4 per cent.

Ms Springall said it is “really important” for savers to understand all the terms on any account before they apply.

The banks do this because it is a useful way to boost their headline rate and get themselves to the top of price comparison sites, in order to attract more money, she said.

“Some will limit the number of withdrawals you can make – or will drop the rate in any month you make a withdrawal.

Tiered interest rates are another headache, she said, because some will offer higher rates when you have more in the account.

Craig Rickman, personal finance expert at Interactive Investor, said: “It’s vital to think carefully and check the small print when finding a home for your hard-earned cash savings, especially at a time when savings rates are falling and inflation is proving sticky.

“When choosing a savings account, you should also consider other factors that can eat into your wealth, such as tax.

“Making the most of your personal savings allowance – which is £1,000 for 20 per cent taxpayers and £500 for 40 per cent ones – and using a cash ISA will mean you get to keep all your interest, instead of HMRC taking a slice.”

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