Hidden Pitfalls of No Notice Savings Accounts
Personal_Finance / Savings Accounts Apr 17, 2012 - 06:43 AM GMTBy: MoneyFacts
When most people think of no notice accounts they think of instant access and no limitations on how they use the account. Research from Moneyfacts.co.uk has revealed that many accounts marketed as no notice or instant access, do, in fact, limit withdrawals - some quite severely.
Sylvia Waycot, spokesperson for Moneyfacts.co.uk, said:
“There is a widely held misconception around no notice accounts. They’re viewed as easy access, but in truth all no-notice means is that you can access your funds, subject to restrictions, without having to give notice. It does not always mean you have unlimited access to funds.
“Many no notice accounts limit the number of withdrawals you can make in a year, ranging from 12 to a shocking none, with the most popular limit being four per annum.
“Go over the agreed number and you will either have your account closed, be charged a fee or lose interest. The interest lost ranges from losing the bonus element of the interest probably the original reason for taking the account - to having the interest plummet to a mere 0.10%. And don’t forget you share that with the taxman! There are even some accounts that will pay no interest at all if a withdrawal is made.
“Other nasties to watch out for include accounts that limit the withdrawals to specific days of the year - very hard to remember. There are others that include ‘closing an account’ as a withdrawal, which could end up in a costly penalty just for moving your money.
“The only way to avoid heartache is to make a note on your account paperwork of how the withdraw system works.”
A full table of the accounts that restrict withdrawals and any penalty for excess is below:
www.moneyfacts.co.uk - The Money Search Engine
Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.
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