Savers could be penalised for "excessive withdrawals"

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Savers could be penalised for "excessive withdrawals"

Fri 9th May 2008

Most providers of savings accounts are likely to penalise customers who make too many withdrawals from instant access savings accounts, according to Moneyfacts.

Michelle Slade, an analyst at the independent financial information group, noted that banks pay a higher rate of interest on savings account because they expect people to keep their money in there for a "serious period of time".

"If people are going to use it as a current account and dip in and out their money, the bank is not expecting you to do that sort of thing, so there is going be some sort of penalty," she said.

According to Moneyfacts' research, some accounts will either reduce or pay no interest in the month when withdrawal is made.

It recommends that savers check the terms and conditions very carefully before singing up to an account.

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