Savers need to look closely at best buy instant access saving accounts for short-term bonuses and restrictive terms and conditions as new Investec Save research shows two out of three top 50 accounts come with strings attached.
These include introductory bonuses that expire, making the account less competitive over time. There may also be restrictions such as limited withdrawals, penalties for exceeding withdrawal limits, and conditions such as needing to open a current account with the provider or maintaining a high minimum balance.
The analysis for Investec Save by Moneycomms found 66% of the top 50 instant access accounts have some form of strings attached. That rises to 80% of the top 10 instant access accounts while 65% of the top 20 have strings attached.
Previous research for Investec Save in October 2023 found 62% of the then top 50 instant access accounts came with restrictions or short-term bonuses, highlighting the ongoing need for savers to look closely before opening accounts.
Nearly one in five (18%) of accounts include a bonus rate of 1.88% for nearly a year on average. Nearly half (44%) restrict the number of withdrawals, while 28% impose interest penalties for too many withdrawals and 16% have restrictions such as a high minimum balance or requiring customers to have a current account with them.
The table below shows savings providers have consistently imposed restrictions on best buy accounts for the past three years. The data shows an increase in the number of instant access accounts restricting withdrawals, those imposing penalties for too many withdrawals, and the numbers with special conditions including high minimum deposits and requiring current accounts.
David Hunt, Head of Savings, Investec Bank, said: “Instant access accounts should be easy to understand but that is clearly not the case. As the analysis shows, the number of accounts which have a range of terms and conditions that can be easy to overlook remains consistently high.
“Customers should always look beyond the headline interest rate and consider whether there are any restrictions, penalties, or short-term bonuses that could affect their returns. At Investec, we’re committed to full transparency, so customers know exactly what they’re getting.”
Investec Save offers a range of savings accounts which do not have any hidden penalty fees or short-term bonus rates.
Investec Save offers a range of savings accounts which do not have any penalty fees or hidden bonus rates. These include its Fixed Rate Saver offering 1-Year, 2-Year or 3-Year terms, which offer between 4.20% AER/gross and 4.25% AER/gross. The Fixed Rate Saver provides simplicity and security for savers. Interest is paid on maturity on the 1-Year and annually on the 2-Year and 3-Year. No withdrawals are permitted until the end of the term, and no further deposits can be made after the first seven days.
Its Online Flexi Saver, which currently offers 4.20% AER (4.12% gross), is a simple and secure instant access savings account, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account. This also makes the Online Flexi Saver perfect for unexpected bills that might arise, such as car maintenance or a vet’s bill.
Investec Save’s 90-Day Notice Saver, which offers 4.43% AER (4.34% gross), gives savers a higher rate of interest than its instant access account and no fixed term. It enables customers to save as well as to pay bills they know are coming up, as they can access savings at any time with unlimited withdrawals by providing 90 days’ notice before withdrawal. It also gives 97 days’ notice before reducing the interest rate on the account.
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