Nearly a third of savers (30%) are losing out on interest by keeping money in a savings account where a short-term bonus has expired, according to new research* commissioned by Investec Save.
Many savings accounts offer an introductory rate to attract customers, but only for a limited period. Once it ends, savers often earn significantly less interest than they could secure elsewhere. Investec Save’s research reveals that over a quarter of savers (27%) took out a savings product with a bonus rate in the past five years. Almost three-quarters of these savers (71%) hold more than £1,000 in accounts with a short-term bonus, with 3% of customers saving more than £100,000 in accounts with a bonus rate.
But savers can be slow to react once these time-limited bonuses expire.
Investec Save discovered that 30% of savers keep their money in accounts where the bonus has expired, while 15% took between one and three months after the short-term bonus had expired to move their cash elsewhere. Almost half (46%) said they moved their money as soon as a short-term bonus ran out.
David Hunt, Head of Savings, Investec Bank, said: ” Our research shows many savers are missing out on better returns by leaving money in accounts where bonus rates have expired. Acting quickly to move to a more competitive account can make a significant difference. At Investec Save, our products come with no hidden strings — no short-term bonuses, no penalty fees — just consistently competitive rates.”
Investec Save offers a range of savings accounts which do not have any hidden penalty fees or short-term bonus rates.
These include its Online Flexi Saver, which currently offers 4.20% AER** (4.12% gross), is a simple and secure instant access savings account, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account. This also makes the Online Flexi Saver perfect for unexpected bills that might arise, such as car maintenance or a vet’s bill.
Investec Save’s 90-Day Notice Saver, which offers 4.17% AER (4.09% gross). It enables customers to save as well as to pay for bills they know are coming up, as they can access savings at any time with unlimited withdrawals by providing 90 days’ notice before withdrawal. It also gives 97 days’ notice before reducing the interest rate on the account.
It also offers a Fixed Rate Saver offering 1-Year, 2-Year or 3-Year terms, which offer between 4.20% AER/gross and 4.25% AER/gross. The Fixed Rate Saver provides simplicity and security for savers. Interest is paid on maturity on the 1-Year and annually on the 2-Year and 3-Year. No withdrawals are permitted until the end of the term, and no further deposits can be made after the first seven days.
For more information on Investec Save products, visit: https://savings.investec.com/
**AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once a year. The AER is intended to be an indicative rate to help you compare the return on different savings products.
