People who have savings account urged to 'check small print' immediately

A warning has circulated showing the "best paying" easy-access savings accounts may not actually be as good as savers think.

UK bank account holders who have a savings account which is "easy access" have been urged to read the smallprint. A warning has circulated showing the "best paying" easy-access savings accounts may not actually be as good as savers think.

Andrew Hagger of the financial information website MoneyComms explained how some banks and building societies use a "bonus element" to boost the overall interest rate on an easy-access saver account "as a way of tricking themselves into the best-buy tables.”

He added: "“It’s up to you to set a reminder for that time to switch to a better savings deal. The providers are banking on you forgetting to do this, enabling them to profit by paying you a sub-standard rate on your nest egg.”

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The Tesco Bank Internet Saver, for instances, advertises that it has an interest rate of 4.4%. But this is comprised of a 3.15% fixed bonus rate for 12 months, on top of the variable standard rate, which sits at 1.25%. So, after a year, the account will only pay 1.25%.

Kevin Mountford, the co-founder of the savings platform Raisin UK, said that while some savings accounts "clearly indicate the limitations in the name", others are not as upfront. He added: "In some cases, accounts that are branded as ‘easy access’ may have hidden limits on withdrawals, only revealed in the fine print."

He added: “It’s important to carefully read the terms, or ask your provider directly to avoid any surprises if you need to access your funds more frequently than the account allows.” Anna Bowes, a co-founder of Savings Champion, explained “For example, the best-paying easy-access account in the market as we speak is Santander Edge Saver Account (Issue 2) paying 6%.

"But this is only for those who have, or open, an Edge Current Account and this rate is only paid on balances of up to £4,000. Anything above earns no interest, so it would dilute the overall return.”