Savers urged to look beyond headline rates

By MoneyhighStreet Staff. Published on August 28, 2008 This post currently has no comments.

Savings
The raft of attractive savings offerings currently on the market may not be all they seem, a financial product rating company has warned.

According to Defaqto many of these products cover up a series of catches and caveats, such as penalties on withdrawals, with headline grabbing interest rates.

A study of 50 of the easy access products paying the best rates conducted by the firm found that 30 per cent limit the number of withdrawals or impose penalties.

Meanwhile, 22 per cent impose a withdrawal restriction of £100 or higher.

David Black, principal consultant of banking at Defaqto, said: "It''s encouraging to see so many accounts offering attractive headline rates but savers need to keep their wits about them to avoid choosing an unsuitable account."

The study also found that 18 per cent of the accounts are open only to older adults 50+, 60+ or 65+.