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Banks criticised over complicated savings accounts

Banks criticised over complicated savings accounts
Date of Publication: Wednesday, 10 September 2014 14:03

A consumer panel has criticised banks for making their savings products unnecessarily complicated.

 

The Financial Services Consumer Panel said that even the simplest accounts are still too complex, with conditions and access restrictions making life difficult for consumers.

 

The Panel criticised banks for failing to improve conditions for savers, following a review into the savings market in the summer.

 

“Reducing complexity would make life much easier for consumers to get a better deal from financial services,” it said.

 

“But, as experience shows, the industry is unwilling or unable to deliver.”

 

 

The Financial Conduct Authority investigated 20 major providers, finding that the terms on savings accounts were surprisingly tough to navigate.

 

Even easy-access accounts are operating contrary to their title. Bonus rates, notice-periods, and limited withdrawals are all affecting the returns that savers receive.

 

This is of some concern to the regulator since easy-access accounts house a vast amount of savers’ cash, with many subtly designed to offer pitiful interest rates.

 

Some accounts require savers to maintain a considerable balance if they want to achieve the advertised interest rate.

 

Others impose limits on the number of withdrawals that can be made before the top rate plummets to something lower. The Websaver Limited Access account from the West Bromwich Building Society allows savers just three withdrawals before they face an interest penalty.

 

Simple accounts without these restrictions remain increasingly rare. Top existing deals include Sainsbury’s eSaver Special, which returns 1.35%.

 

Keith McDonald

Which4U Editor

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Wednesday, 10 September 2014 14:03
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