Consumers should check the small print on the increasing number of savings accounts that are offering introductory bonuses, according to Defaqto.
For example, Egg’s internet savings account has a 2% introductory bonus for 12 months, taking its savings rate to 3.5%, but beware – after 12 months it drops back to its standard rate of just 1.5%.
Financial data company Defaqto says that there are currently 134 bank accounts offering introductory bonuses, of which 14 have an introductory bonus equal to, or greater than, the current Bank of England base rate of 1.5%.
David Black, principal consultant for banking at Defaqto, said: ‘With the bank base rate so low it now makes sense to have a look at the accounts offering an introductory bonus provided that savers follow the golden rule of putting a reminder in their diary for around the time that the bonus ends so that they can look around for a suitably competitive alternative savings account’
Consumers should also look at the small print however and check that they’re not going to be penalised for making too many withdrawals or that the bonus is not conditional.
It’s not just instant and easy access savings accounts that are offering introductory bonuses, there are also 28, notice accounts, 22 cash Isas, 3 regular monthly savings accounts and 1 current account that are boosted by introductory offers.
If you’re financially savvy, it can be a good idea to capitalise on these offers but it’s crucial that you make a note to switch accounts when the bonus period ends to make the most of better deals.
Savings Best Buys
Jo Langenhan, senior researcher at Which? advises people to check out the Which? savings Best Buy tables for longer lasting bonus offers.
She said: ‘We only include accounts offering bonuses that are payable for 12 months or more. Remember to check your account is still paying competitive rates once the bonus period has finished.
‘If it’s not, then you should switch to one of our Best Buys. There are top-paying accounts that do not offer bonuses, so consider these too.’
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