The best easy-access savings accounts for your cash right now
BANKS are luring customers with savings accounts with "teaser rates" that drop off after a year.
So-called easy-access account are meant to be the most straightforward way of putting cash aside for a rainy day.
Some of the best ones pay a bonus rate of up to 1.3 per cent - but there's a catch.
The eye-catching rate is only valid for a limited period of time, after which it drops and you can end up earning as little as 0.05 per cent.
According to research by Hargreaves Lansdownes, while there are only nine bonus accounts on the market – they account for four of the top six easy access accounts.
This includes the new market-leading deal from the Post Office, which pays 1.33 per cent with a 12-month bonus of 1.08 per cent- but it falls to just 0.25 per cent, after the first year.
So what are the top easy-access savings accounts? And how to make the most of them?
Here's what you need to know:
What are easy-access savings accounts with teaser rates?
Teaser rates or introductory offers, use higher than average interest rates to lure customers into opening new accounts.
Sadly, these rates only last for a temporary period of time - typically 12 months. After this they tend to drop dramatically.
Bear in mind that the fact that an interest rate is an introductory offer should be made clear to you.
So have a thorough look through terms and conditions before signing up and look out for the asterisk next to the advertised interest rate.
How to make the most out of the bonus rate?
If you want to make the most of the bonus offer, you need to make sure you set a reminder to move your cash to avoid being caught out by this "teaser rate".
Alternatively, you can also go for an easy-access account that promises longer-term returns.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said:“Bonus rates on savings accounts are ‘very 2010’, because back then they made up one in ten new accounts on the market.
Is bonus a bad thing?
Should opt for an easy-access savings account with a bonust
- Yes - If you are a committed switcher , you can get a better rate. In the top ten accounts, the average bonus rate is 1.3 per cent, while the average without a bonus is 1.26 per cent.
- But - Most people don’t switch. When the FCA questioned people about their most recent expired bonus rate, 57 per cent of people admitted they hadn’t switched.
- What should I do - Make sure you do your research before signing up. Some of these bonuses are significant - the Post Office account has a 1.08 per cent bonus, so after a year it reverts to 0.25 per cent.
If you're not a committed switcher, you mighjt be better with a simple bonus-free account.
"However, like all fashions eventually do, bonus rates are making a comeback.
“But as so many people learned with leopard print, just because something is becoming more fashionable, it doesn’t mean it will suit you.
"If you’re not the kind of person who remembers to switch on the day a bonus rate expires, you’ll be better off with a simple bonus-free account.”
What are the best deals around?
According to Hargreaves Lansdown, the Post Office is the market-leading easy-access savings account paying 1.33 per cent interest.
The account allows unlimited withdrawals and can be opened with just £1.
For the first 12 months, you'll benefit from a 1.08 per cent bonus. The rate on the account will then plunge with your savings earning just 0.25 per cent.
Still, it means that if you invested £500 you'll get about £506.69 in a year's time.
More tips for savers
Coventry Building Society ranked second with a 1.30 per cent interest, with an added bonus of 1.01 per cent for the first year.
Customers will get about £506 after a year, for those who invested £500 - or almost double their initial investment
But not all of the top easy-access account come with a bonus. Tor exampleRCI Bank easy-access savings account pays 1.33 per cent interest.
Are there any alternative accounts for savers?
THE Sun Online took a look at the best-paying accounts on the market which will give you the most bang for your buck
- Fixed rate accounts: Fixed-rate accounts will typically offer better rates than normal, easy access accounts, so if you know you can afford to tie your money up for between one and five years, it'll be worth looking at these type of accounts.
With these accounts you'll always need to check how much you need to open the account with - some have really high limits which won't be available to most people. - Current account savings: Rates are much lower on these accounts than in previous years. Yet you can still beat the easy-access rates above on small amounts, and some even offer security of rate. The advatange is once the account's opened, these are locked in, regardless of base rate cuts or banks lowering rates.
- Isa accounts: An ISA (Individual Saving Account) is a tax-free way to save or invest. So, if you're starting to think about saving or investing, it could be a good place to begin. Here's our guide to the best cash ISA account in 2018.
It can be opened online with an initial deposit of £100. But even without the bonus rate, customer will save get £506.50 after 12 months - the same amount as with
Sometimes it feels like making payday stretch until the end of the month is an almost impossible task, let alone putting anything aside to save.
BANKING BASICS Basic bank accounts – how to apply and get accepted
But there are ways of making it work without having to take out a second job. Here's our guide on how to save more than £10,000 a year.
The Sun Online took a look at the best-paying accounts on the market which will give you the most bang for your buck.
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