Consumers should beware of ‘artificially high’ savings rates

Sainsbury’s Finance has warned of the need for care when choosing a savings account.

Although many banks currently offer high interest rate options there can be restrictions and conditions which customers need to be aware of, head of savings Helen Cook has said.

She added that there would have to be “some compensation on the other side”, commenting: “Because these rates are so high at the moment, then they’re likely to reduce the margins faster than they might have done historically.”

The warning comes as Sainsbury’s released findings from Defaqto that showed out of the top 50 savings accounts in the UK, four apply a penalty for making a withdrawal and 12 restrict the number that can be made.

Ms Cook said that despite the large number of accounts available “when you filter down to the individual customer to what they’re after then I think the choice becomes much slimmer”.

Last week the British Bankers’ Association revealed that consumer credit rose in May as a result of lower credit card repayments.

© Adfero Ltd

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