A third of the UK's savings accounts which offer rates in excess of five per cent have restrictions on withdrawals, a study has revealed.
Of the 38 savings accounts to offer this level of interest, eight apply interest penalties when withdrawals are made or notice periods while three apply only the notice periods, according to research from Sainsbury's Bank.
Additionally, seven of the savings options require minimum withdrawals to be made, while one applies a penalty if the withdrawal is not for a specified purpose.
Peter Wood, head of savings at Sainsbury's Bank, said: "There are now more savings accounts paying at least five per cent interest than there have been for a number of years, but people need to read the terms and conditions carefully because many of these accounts apply restrictions when it comes to accessing your money."
However, Mr Wood added that savings accounts are available which offer interest topping the Bank of England's base rate, while still giving the customer freedom to make withdrawals.
Rachel Thrussel, the head of savings at Moneyfacts, recently claimed that more providers are attaching terms and conditions to instant access savings accounts, which she described as a "contradiction in terms".
Many savings accounts restricted, study shows
Many savings accounts restricted, study shows
Wed, 25 Oct 2006
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