Instant Access Savings Account Rates Fall As Bonuses Expire

Savers who put their money into instant access savings accounts last year are being urged by moneysupermarket.com to switch to a new deal when their bonus rate expires.

According to the price comparison website, bonuses account for more than half the AER on the average instant access savings account, and the average loss could add up to £86 if savers do not switch to a new deal.

For instance, ING Direct’s easy access savings account was offering savers a rate of five per cent AER at the beginning of 2009 – including a bonus of 2.17 per cent, however, the current rate after the bonus is 0.50 per cent.

Meanwhile, Egg’s internet savings account now provides existing savers with a return of 1.25 per cent, having previously offered customers a rate of four per cent in January last year.

Commenting Kevin Mountford, head of savings at moneysupermarket.com said: “It’s likely that many people will have broken their New Year’s Resolutions already but if there’s one thing they absolutely should apply themselves to, it’s making their money work as hard as possible for them in 2010.”

Mr Mountford believes savers with easy access accounts are more susceptible to losing out than those with a fixed-rate account who know from the start what their rate will be for the defined period of time.

He added: “It’s imperative that savers look out for a bonus when searching for the best deals on easy access accounts – there’s nothing inherently wrong with a bonus but when it expires, it’s served its purpose.”

© Fair Investment Company Ltd