A stark warning has been issued for anyone with money in a so-called "premier" current account. Spring, a financial services firm, has cautioned that the majority of paid-for and premier current accounts marketed by big banks come with significant restrictions and poor rates.
Key Findings from the Research
Spring's research, conducted in partnership with Moneycomms, revealed that only 23 per cent of easy access savings accounts offered through paid-for or premium current accounts are free from additional restrictions. Among the premier and paid-for accounts examined, almost half apply tiered interest rates, meaning customers with higher balances often earn lower interest on their money.
Examples of Poor Rates
The analysis found that one of the big five high street banks offers no interest on balances over £4,000. Another bank provides just 0.70 per cent on balances over £5,000. Almost a third of these accounts enforce withdrawal restrictions, while three of the five high street banks offered rates of under 1.35 per cent on balances of under £100,000.
Expert Warnings
Derek Sprawling, head of money at Spring, said: "Premium and paid-for current accounts are often sold as offering more, but our analysis shows that for many savers they actually deliver less, particularly if they want a true easy access account. From tiered interest rates that penalise higher balances to withdrawal limits that restrict access to your own cash, these accounts frequently come with conditions that quietly erode their value."
He added: "Paying a monthly fee or meeting high income thresholds doesn't automatically guarantee a good return."
Andrew Hagger, personal finance expert at Moneycomms, commented: "Accounts with the name 'reward' or 'bonus' in the title would lead you to believe you're getting a preferential rate - unfortunately, in many cases that's not true. The fact you're paying a monthly fee for an account doesn't guarantee you'll get a competitive savings rate, in fact, far from it in many cases, particularly with some of the big high street banks."
