Which!!! instant access bank accounts come with no strings attached?

23 September 2014

savingsYou'd think 'instant access' bank accounts would mean you can get at your money whenever you want it, wouldn't you? Yet in four out of ten examples of instant access accounts, it seems that ‘instant access’ doesn’t necessarily mean that the account comes with instant access, or at least no penalty-free instant access.

New research from our friends over at Which!!! analysed the 285 instant-access and cash ISA savings accounts on the market, revealing that 39% of them come with rules and restrictions that could prevent people accessing their savings or being able to apply for the account in the first place. Well, the banks never promised instant access for all, now did they?

For example, the best deals are often restricted in access even to open the account, with 10 of the highest interest-paying accounts available only online, and three being available only to people of a certain age. Other restrictions include those accounts only available to current account holders with the same bank, or savers drawn from a certain geographic area.

But even if you can get an account, your interpretation of instant access might be a little different from that used by the bank. A massive 32 of the 285 accounts branded ‘instant-access’ actually limit the number of withdrawals you can make during a year. As in, after the maximum withdrawals, you may be left with a no-access, rather than an instant access account.

Furthermore, nine out of the 18 highest-paying instant-access or no-notice savings accounts reduce or remove interest payments if you make more than the set number of withdrawals- the maximum number of withdrawals in some cases being zero. That's correct, zero permitted withdrawals on an instant access savings account. Certain accounts from Danske Bank, First Direct, HSBC and Santander don’t allow any withdrawals without imposing a penalty for example, someone saving £10k in Danske Bank’s eSaver account who made minimal withdrawals for 6 out of 12 months would end up with only £36 interest, instead of £75 if no withdrawals had been made. Not that £75 on £10k is anything to write home about, but it’s more than twice the penalty rate of interest.

Richard Lloyd, chief spokesperson for 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.”

TOPICS:   Banking

1 comment

  • Thanks I.
    OR DO YOU KNOW OF A BETTER PLAN ?

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