Yet again we see examples of sneaky marketing by the financial institutions, this time on so called easy-access savings accounts. Research just published by Datamonitor has revealed that nearly 20% of all 'easy-access' savings accounts impose penalties if you withdraw money.
So yes, your money is never locked up and can be accessed at anytime but still the phrase 'easy access' generally promotes the fact that there will be no penalties whatsoever. Our main gripe is that the marketers have hijacked the phrase 'easy access' when there is actually a name for accounts that impose a penalty for withdrawing cash, 'notice accounts'. 'Notice Accounts' however don't sell as well as easy-access.
How Do The Penalty Tricks Work
- Many of these 'easy-access' accounts pay a bonus interest rate which is withheld if a certain amount of withdrawals is made over a set period of time
- Northern Rock's Instant Access account pays an absolutely pathetic 0.75% per annum but if customers make even one Withdrawal the rate drops to 0.25%
- Abbey pays 3.6% on up to £10,000 but cuts this to 2.6% if clients make more than 13 withdrawals in a year
- Good paying accounts like First Direct's eSaver pay no interest in any month when money is withdrawn
Stick With The Good Guys
Vote with your feet and move accounts if your bank or building society is playing these underhand games. Surely a company that tries to trick its clients is a company that one shouldn't really be doing business with. It's just common sense, especially as there are banks out there that have an excellent history of playing fair to their clients and giving them good deals.
We Like ING Direct & The Nationwide
Both these companies get outstanding reviews from present clients and industry insiders alike because they not only treat their clients fairly but more importantly have a history of doing so. They've both got similar savings account -
- 4.75% per annum
- Truly instant-access (no penalties whatsoever)
- Internet operated
- £1 minimum opening balance
Summary
The banks are desperate for deposits and therefore the ones who think they're being clever by trying to con their clients must be punished. You have this power, just move your money to a bank that treats you fairly without any tricks or sleight of hand moves. We personally bank with both ING Direct and the Nationwide and are very happy with not only the service but the rates of interest.
See Also
