Sainsbury's Bank: Read small print on high interest

25 October 2006
A significant proportion of savings accounts that offer interest above five per cent per annum attach conditions limiting withdrawals or charge penalties for taking out money.

According to the findings of Sainsbury's Bank, nearly a third (31 per cent) of higher rate accounts impose penalties or require a period of notice for withdrawals, while an additional 18 per cent have minimum limits on how much can be taken out.

Peter Wood, the head of savings for Sainsbury's Bank, argued that it was possible to receive a high rate of return without compromising on your rights of withdrawal.

"There are now more savings accounts paying at least five per cent interest than there have been for a number of years," he said.

However, Mr Wood did also warn consumers to "read the terms and conditions carefully" as many would apply restrictions that could hamper your future financial planning, especially in the event of needing to access cash unexpectedly.

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