Savers are being urged to look beyond headline rates of instant access savings accounts - or they could end up forfeiting interest paid. According to Moneyfacts, providers are increasingly setting withdrawal terms and conditions on the level of interest paid. This week, Alliance and Leicester launched its Direct Saver account, paying 5.25 per cent each month. But if any withdrawals are made, the interest is lost. First Direct and HSBC apply similar restrictions on their instant access savings accounts. Rachel Thrussell from Moneyfacts says: 'Within the traditional definition of an instant access savings account, the concept of incurring a penalty for withdrawals would be a contradiction in terms.
Tags:
Withdrawals
Forfeiting Interest
Penalty
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