Instant access savings charges can be high, says expert

Consumers who open an instant access account should be aware that although they can withdraw their money without notice, some banks will charge them for doing so, according to a financial analyst.

Michelle Slade of Moneyfacts, a personal finance website, has said that as many as one in four banks charge their customers hidden penalties for taking money out of an instant access and no-notice savings account.

Last month, Nationwide published research on savings accounts which showed that 84 per cent of consumers believe there should be no penalty for withdrawals and 54 per cent say it is very important or essential that there is a no-notice period.

Ms Slade says: “The term ‘instant access’ is not misleading, but some would say that they should not really be charging a penalty just for you taking your money out, especially as some of the charges really are quite high.”

According to the analyst, some accounts either reduce the interest or do not pay it for the month in which a withdrawal is made.

Tags: banks, withdrawals, expert, access, Business Finance

Lenders to start withdrawing 100% mortgage deals

Following the withdrawal of 125 per cent mortgage deals, many lenders are beginning to remove 100 per cent deals too, one finance expert has claimed.

Moneyfacts.co.uk has said that 100 per cent mortgage deals are becoming expensive and harder to find, and this is a market trend which will affect first-time buyers the most.

Since November almost one third of lenders offering the rate have withdrawn their products from the market, leaving only 28 providers.

Julia Harris analyst at moneyfacts.co.uk, said: “This is yet another example of lenders continuing to tighten their belts even further in what has become a vastly different mortgage market from this time last year.”

Those who are looking to get on the first rung of the property ladder will find there are fewer options without a deposit.

First-time buyers could have to pay a larger premium for the added risk that the lender is taking on, he added.

Meanwhile, the Council of Mortgage Lenders has reported that while gross lending held up well in January, there is still “considerable uncertainty in the housing market” at present.

Tags: moneyfacts, market trend, lenders, different mortgage market, larger premium, first time buyer, example, rate