Savings Accounts and ISAs Come with Complicated Rules, Research Shows

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2nd October 2014 11:29 - Financial Services

According to recent research carried out by Which?, around two fifths (39%) of instant-access and cash ISA savings accounts come with rules and restrictions that can prevent people from accessing their savings, or being eligible for the account in the first place.

The research, which assessed 285 instant-access and ISA accounts, uncovered that 32 of the “instant-access” accounts measured limit the number of withdrawals you can make during the year.

Furthermore, nine out of the 18 highest paying instant-access or no-notice saving accounts reduced or stopped interest if the account holder made more than the set number of withdrawals per year. Banks such as Danske Bank, First Direct, HSBC and Santander do not allow any additional withdrawals without a penalty.

More than two thirds (68%) of the Which? members surveyed said they would expect to be able to withdraw their money from an account branded “instant-access” whenever they liked, with zero restrictions.

Additionally, three of the top 16 highest rates on instant-access accounts (excluding cash ISAs) are only open to savers of a particular age.     

Moreover, 10 of the 14 top-paying accounts, that have no other restrictions, are internet-only, so those who prefer to bank in person may lose out on the best rate.

Other rrestrictions uncovered include accounts that are limited to people who already have a current account with the provider, or who live within a certain area or postcode.

The research also discovered that three in 10 (29%) instant-access cash ISAs, including nine of the highest paying 15, do not allow you to transfer your previous year’s ISA saving, resulting in customers missing out on higher rates of interest on those savings.

Richard Lloyd, Executive Director at Which?, said: “People often assume “instant-access” means there are no strings attached, but too often that’s not the case and you can’t always access your savings without being penalised. 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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