Money hacks How to navigate the small print on savings accounts

Check for bonuses Providers are jostling for position at the top of the best-buy tables - but the best-paying accounts often come with caveats that can catch out unwary savers.

- Emma Lunn

Andrew Hagger of the financial information website MoneyComms says: "Some banks and building societies use a bonus element to boost the overall interest rate on easy-access savings accounts as a way of tricking themselves into the best-buy tables."

He says this means that while at the time you sign up for one with a bonus, it may well be competitive. But when that bonus drops away after six or 12 months, it is unlikely to be offering such good value.

"It's up to you to set a reminder for that time to switch to a better savings deal," he says. "The providers are banking on you forgetting to do this, enabling them to profit by paying you a sub-standard rate on your nest egg.”

Examples include Tesco Bank's Internet Saver, which pays 4.4% (annual equivalent rate). But that is made up of a 3.15% fixed bonus rate for 12 months, on top of the variable standard rate, now at 1.25%. After a year, the account will only pay 1.25% – or less, if rates have fallen.

Post Office Money's Online Saver Issue 75 is similar. It pays 4.55% AER, which includes a 3.10% bonus for 12 months. At that point it falls to the standard rate, now 1.45%.

Don't assume 'easy' is easy

Savers usually choose an easy-access account when they want the freedom to withdraw their cash whenever they want. But some best-buy accounts limit the number of withdrawals you can make each year without losing interest.

Analysis of Moneyfacts data, by the consumer group Which?, found that half the current top 10 market-leading instant-access accounts place a limit on the number of withdrawals you can make before the interest rate falls.