Best savings deals are closed to many

23rd September 2014

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Millions of savers who are seeing their returns squeezed by rock bottom interest rates are now finding that many of the highest paying accounts are out of their grasp due to eligibility restrictions.

All the top-rate accounts have criteria limiting who can apply, analysis by MoneySuperMarket.com, the price comparison website reveals.

The four best-rate cash Isas all impose a restriction on who can access them.

Coventry Building Society’s market-leading Branch Instant Isa, pays 2% AER, but is only available through its branches.

First Direct offers 1.7% AER on its Cash Isa, but only allows instant access by transfer to another First Direct account.

Monmouthshire Building Society’s Cash Isa 6 and HSBC’s Loyalty Isa are restricted to those in certain geographical area or existing customers.

This means the highest rate available with no restrictions is from BM Saving’s Isa Extra (Issue 11) at 1.55% AER.

The same is true for easy-access savings accounts as the top five all have criteria restricting the products to either existing customers, residents of a certain area or people who can access their branches.

The highest rate available to all is 1.4% AER, while the best rate with restrictions is 2.1%.

Kevin Mountford, head of banking at MoneySuperMarket, said: “It’s a tough environment at the moment for savers, and restrictions on accounts make it even harder for the majority of consumers to benefit from the best rates being advertised.

“Whether it is restricting the number of withdrawals being made from accounts, limiting account opening to existing customers or only allowing account opening within branches, providers are using a range of tactics to make their very best deals hard to access. ”

Mountford said that bonus rates are not as popular as they have been in the past, with only a handful of providers offering them.

He said that in many cases current accounts are now offering better returns than savings products, but that the tax advantages of cash Isas mean they should always be the first port of call.

2 thoughts on “Best savings deals are closed to many”

  1. Noo 2 Economics says:

    “….but that the tax advantages of cash Isas mean they should always be the first port of call.”

    Debatable, given that nearly all providers automatically set the interest rate on their ISA offerings 20% below that offered on their non ISA offerings – nothing to gain here.

  2. therrawbuzzin says:

    My Santander current account pays 3% on balances of £3k-£20k, and as a carer without formal employment, who doesn’t pay tax on interest at this level, that’s about the best return possible.

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