Although Fixed Term Bond rates have been slowing, there has continued to have been some activity in the variable account tables, in particular the Easy Access accounts. But we’ve also noticed that many restricted access accounts have been cropping up once again, taking up a number of spots in our best buy table.
Restricted access means that although you can make easy access withdrawals from these accounts, you can only do so a certain number of times each year – which means that they may not be appropriate for everyone.
The restrictions to the accounts that appear in the best buy tables tend to range from just one withdrawal a year to maybe six a year and what this means is that you can’t make withdrawals willy-nilly. But because you can make at least one penalty free withdrawal, we feel that it’s important to include these accounts in the easy access best buy table.
But we’ll always include accounts that are not restricted too – so those that need true easy access can also see the best accounts that could be right for them.
For many people the fact that there is a restriction could actually be a real benefit as it might make them think twice about withdrawing money if they don’t really need it!
Why do providers do this?
Whilst some people genuinely need regular access to their cash, for others it’s just good to be moving from a poor paying account to something that will pay them more – and if that means encouraging more people to switch then it’s a good thing. The reason that a number of providers do put a restriction on the number of withdrawals meant that they can feel more confident that they can hold onto it. These accounts are great for those who might not want to touch their cash very often – or at all.
At the time of writing, the top easy access account is paying 5.2% with Ulster Bank and there is no restriction on the number of withdrawals that can be made. But the account in 2nd place is the Double Access Account Issue 4 from Paragon which is paying 5.16% AER. As the name suggests, you can make just two penalty free easy access withdrawals a year – if you make a 3rd withdrawals the rate you’ll earn will drop to 1.50% AER going forward.
What are the alternatives?
If you don’t need access immediately, perhaps a notice account would be better alternative as the top rates on offer are even higher. This is because you have to give notice on any money that you want to withdraw. The top paying account is the 200 Day Notice Account from Chorley Building Society, paying 5.65%, but Shawbrook Bank is paying 5.56% on its 120 Day Notice Account. Whilst not quite making it into the top 5, Cynergy Bank and Harpenden Building Society have the best paying 95/90 Day Notice Accounts paying 5.50% AER.
The fact that restricted access and notice accounts can offer savers that might not need immediate access to their cash a better rate than the traditional easy access options, reminds us that there are lots of options available – so check out our best buy tables to find the best rates to meet your requirements.