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Complicated rules for ‘simple’ savings accounts

Penalties and charges despite instant-access label

Wallet chained and padlocked

Four out of every 10 instant-access savings accounts and cash ISAs come with strings attached, according to new Which? research. 

Last month, we analysed the 285 instant-access and cash ISA savings accounts on the market and found that 39% of them come with rules and restrictions that could prevent people accessing their savings or being able to apply for the account in the first place.

We found:

  • 32 of the 285 accounts called ‘instant-access’ actually limit the number of withdrawals you can make during a year.
  • Nine out of the 18 highest-paying instant-access or no-notice savings accounts reduce or stop interest if you make more than the set number of withdrawals (ranging from zero to 12).
  • Certain instant-access accounts from Danske Bank, First Direct, HSBC and Santander don’t allow any withdrawals without imposing a penalty.

Although some of these instant-access accounts do clearly outline the restrictions, we feel that limitations on withdrawals goes against the spirit of an instant access account. Many providers offer alternative instant access accounts with more flexibility, but these typically pay a lower rate of interest.

The Which? savings and Isa comparison tables let you search all available savings accounts and Isas from all available providers to choose the best savings rates based on quality of service as well as cost and benefits.

Find out more: Savings and Isa comparison tables – compare the best deals on the market

Savers face frustrating restrictions  

Other frustrating restrictions include accounts that are only open to people who already have a current account with the provider, to people who live within a certain area or postcode, or to people who are a particular age.

We also found 29% of instant-access cash Isas, including nine of the highest paying 15, don’t allow you to transfer previous years’ ISA savings, meaning you could be missing out on higher rates of interest on these savings.

Which? calls for providers to Scrap the Savings Trap

We are calling for savings providers to Scrap the Savings Trap and help people make the most of their money.

Richard Lloyd, Which? executive director, said: ‘Savings providers should be more upfront about the terms and conditions of all their accounts and allow transfers in to new ISAs.’

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