Thursday 3rd July 2008
Attention-grabbing savings account interest rates might disguise restrictions on accessing money once it is deposited, Sainsburys Finance warns.
Head of savings Helen Cook explains that savings accounts which prove tempting to those with large amounts of money to put aside equally lead the banks to try to keep hold of those deposits.
"They know that by having larger rates theyre going to get bigger balances - and if they can hold on to the money it would be better," she contends.
She adds that financial services providers may be more likely to discriminate among their customers in order to supply justification for higher headline rates.
Restrictions which may be placed on accounts vary from penalising the customer for making a withdrawal by reducing the amount of interest paid to placing a limit on the number of withdrawals which are permitted in a given period.
However, Ms Cook asserts that Sainsburys Finances own savings accounts have consistently remained above the Bank of Englands base rate since the beginning of the year.
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