Savers hit by charges for "excessive" withdrawals
12th May 2008
Consumers hoping to make the most of their savings accounts have been warned to watch out for penalty charges for making "excessive" withdrawals.
Independent financial information provider Moneyfacts has been advised those with instant access savings accounts to check the small print when they open accounts to avoid paying penalties.
Instant access and no notice accounts are a popular choice for savers because of the freedom it offers them to get immediate access to their money. Research by Moneyfacts shows, however, that almost a quarter of accounts have conditions attached to making withdrawals.
Michelle Slade, analyst at the independent financial information group, explained why savers risk penalties for excessive withdrawals: "The bank will pay you a higher rate of interest but they are expecting to keep your money for a serious period of time."
According to research on savings accounts published by Nationwide in March 2007, consumers do not expect to be charged for withdrawals with 84 per cent of those surveyed believing it is important that there is no penalty for withdrawals.
Moneyfacts has estimated that savers could be missing out on hundreds of pounds of interest by not checking the terms and conditions of their account first.
© Adfero Ltd