New research has shown that interest rates on savings accounts are starting to creep up; but the good news comes with a health warning.
According to the comparison service Moneyfacts, the average interest rate on the top 10 ‘easy access’ savings accounts, has risen to 1.48%, up from 1.39% a year ago.
The rise comes at a time when speculation has intensified that the Bank of England may push up interest rates over the course of the next few months.
Whilst savers, who have had to put up with low interest rates for over five years, will welcome the news of the increase, it comes with a health warning.
Moneyfacts has identified a growing trend amongst banks and building societies to restrict the access savers have to their cash, even on ‘easy access’ accounts.
Their research found that restrictions vary; one savings account allows up to 150 withdrawals per year, which is enough for most people, however others are far more restrictive. Indeed some ‘easy access’ accounts only allow one withdrawal per year.
The increase in the number of restricted ‘easy access’ accounts could be particularly problematic at the current time. With interest rates expected to rise, many savers will want to avoid longer term fixed rate bonds and opt for ‘easy access’ accounts, which will allow them to move their savings take advantage of potentially higher rates.
Whilst most banks and building societies make any restrictions on the number of withdrawals very clear, experts are warning savers to check the small print before opening an account.