Savings market confuses consumers

by Gill Montia

Story link: Savings market confuses consumers

Moneyfacts, the financial data provider, is advising savers to look carefully at the restrictions and conditions attached to some savings accounts.

Over 90 bank and building society variable rate accounts currently pay at least 5.75% (base rate).

However, according to Moneyfacts, 76% of accounts paying base rate or above come with restrictions, conditions or introductory bonuses of some description.

Most commonly accounts are being made available for members or existing customers only and those investing new monies.

Some also insist on a limited number of free withdrawals, age restrictions, withdrawal limits, loss of interest for withdrawals, and specified uses for the funds.

For example, the Britannia BS HomeSaver instant access account pays 7.50% gross per annum on balances of £5,000, but withdrawals are subject to 90 days’ loss of interest unless used for a Britannia mortgage.

The 90 day Scarborough BS Click & Save Notice Issue 2 account pays 6.50% gross per annum, but the rate includes a 1.00% bonus until September 30th 2008, then a 0.25% bonus until September 30th 2009.

For savers who haven’t the inclination to keep track of restrictions and bonuses, Moneyfacts recommends any of the following “no-strings attached accounts”: Chelsea BS Call Direct 30 2nd Issue (30 days’ notice), paying 6.40% ; Sainsbury’s Bank Internet Saver (no notice), 6.25% ; Icesave Easy Access (no notice), 6.20% ; Anglo Irish Bank 7 Day Notice, 6.15% ; Market Harborough BS onthedot 30 Day Notice, 6.15% and Anglo Irish Bank Easy Access Deposit (no notice), 6.10%.