Research by Sainsbury’s Bank has revealed a marked increase in accounts that have short term bonuses or terms and conditions that penalize savers for withdrawing money.
The research, carried by Defaqto and Moneyfacts on behalf of Sainsbury’s, showed that between January 2005 and May 2007, there has been a 45% increase in the number of instant/easy access accounts that carry a short term bonus, and a 26% increase in instant and easy access accounts that apply penalties for withdrawals.
Peter Wood, head of Sainsbury’s Savings, warns savers to check all terms and conditions thoroughly before opening an account.
"With so many accounts in the market, savers need to think about which savings account best suits their needs, whether that's benefiting from a short term bonus or being able to access their funds without any penalties,” he said.
“There are a number of attractive accounts for savers to choose from, but it is important to understand the terms and conditions. If you don’t, you could be in for a surprise when your rate drops or your bonus expires.
Sainsbury’s Bank today announced that it is to increase the interest rate on its internet saver to 6%. The account does not rely on short term bonuses and has no restrictions on withdrawals.
Mr Wood said: “The internet savings market has become increasingly competitive, and there are some great rates available. We're proud to be able to offer such a superb rate with unlimited access to funds.”
Find out more about Sainsbury’s Bank Savings Accounts