Double Access Accounts

[Deleted User]

There are several accounts with limited access paying better rates than easy access accounts.  However, there is one aspect of these accounts which baffles me.  The T&C states that you get a higher rate if you do not make more than 2 withdrawals (sometimes even 3) per year.  But, there's nothing as far as I can see to stop you from closing the account before the one year. So, can someone please tell me if there is anything to stop you from closing the account after making the max withdrawals to avoid the lower 'penalty rate? 

If this is allowed, then you can open another similar account and start earning the higher interest.  Presumably, this could be with a different bank or perhaps even with the same bank.        

eskbanker

[Deleted User] said:

There are several accounts with limited access paying better rates than easy access accounts.  However, there is one aspect of these accounts which baffles me.  The T&C states that you get a higher rate if you do not make more than 2 withdrawals (sometimes even 3) per year.  But, there's nothing as far as I can see to stop you from closing the account before the one year. So, can someone please tell me if there is anything to stop you from closing the account after making the max withdrawals to avoid the lower 'penalty rate?

If you've read the Ts & Cs for the account(s) you're looking at and satisfied yourself that there's nothing included that penalises closure in that way then yes, you can do that - not sure what else there is to say without knowing which specific product(s) you're thinking of?

refluxer

Which limited access accounts are you referring to ? The best easy access account (but with limited withdrawals) is currently Aldermore's offering @ 0.75%, but if you think there's a good chance you'll need to make more than 2 withdrawals a year then there are a number of easy access accounts with unlimited withdrawals paying around 0.7%, so is it really worth worrying about the 0.05% difference for the potential hassle of having to switch accounts ?

I guess Aldermore's account would be a good option if you thought you were likely to not need to make more than the permitted number of withdrawals, but you might have account closure as a back-up if your circumstances changed and you found you needed to access the money more than twice.

As these are all easy access accounts then I would suspect that you should be able to close the account at any stage but, as previously suggested, you would have to read the T&Cs carefully to make sure.

jimjames

If you want easy access and good rates then would a current account be a better option unless you have significant sums of money you want to take in and out? You can get over 1% on one or more current accounts and 2% on smaller sums of £1000.

Some accounts may pay no interest if you close before the term is up so that might scupper the plan.

pokora

Remember the final withdrawn will count as +1 against your maximum.

ColdIron

It depends upon the account. For instance with the Aldermore Double Access Account the interest rate doesn't change after the first 2 withdrawals but will drop on the day of the third withdrawal until the anniversary date. Obviously if you withdraw the full balance there is nothing to apply the lower rate to so there would be no penalty

• With the Double Access Account, your interest rate depends on how many times you take money out in any anniversary year. You’ll get the benefit of the higher interest rate if you make two or less withdrawals in an anniversary year. If you make three or more withdrawals, the lower interest rate will apply from the day of your third withdrawal to the day before the annual anniversary of your account opening.

Albermarle

then there are a number of easy access accounts with unlimited withdrawals paying around 0.7%

As far as I can see there are only two - Investec and Cynergy, and the former has a minimum deposit of £5k