Focus on: Earn 2.05% on your savings with West Brom

In the current market, it's rare to see a bank or building society launch a top-paying savings account – yet this is exactly what West Bromwich Building Society has done.

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Its Direct Bonus Account Issue 6 pays a table-topping annual equivalent rate (AER) of 2.05% and still allows savers to get instant access to their money, although only four penalty-free withdrawals are permitted each year.

The account isn't available on any other comparison site except MoneySupermarket, so let's take a closer look to see if it's the best option for you.

What's the deal?

The West Bromwich Direct Bonus Account pays an annual interest rate of 2.05%.

The rate is variable, which means it could change at any time, and it includes a fixed 0.55% bonus until May 31, 2014. After this, the interest rate falls to 1.50%.

The account requires a minimum deposit of £10,000 and up to £100,000 can be held in it – but remember that only the first £85,000 is protected under the Financial Services Compensation Scheme (FSCS). The minimum operating balance is lower at £1.

Withdrawals are permitted, but only up to a maximum of four a year. If you make more than this, you will be charged 90 days' interest on the amount withdrawn.

You can access the account by post or by phone. The application process is completed online but downloaded application forms have to be returned by post. You can add further funds to the account whenever you wish to.

At 2.05%, the West Bromwich Direct Bonus Account is the most competitive easy access account available to everyone. Newbury Building Society and the Tipton & Coseley Building Society both offer easy access savings accounts at 2.10% but they come with restrictions. The Newbury account is only open to those who have had an account with the building society for two years, and the Tipton & Coseley account is only available to existing members and to those living in certain postcodes in the West Midlands.

Who's it good for?

The West Bromwich Direct Bonus Account is ideal for anyone with a large lump sum to invest who is looking for a better rate of return on their savings, but still needs to gain a certain amount of access to their funds.

Any catches?

One of the biggest catches with this account is the hefty £10,000 initial deposit. It's a sizeable sum of money in anyone’s book and, as a result, it's not a realistic option for first-time savers.

Another catch is the withdrawal restrictions. Despite being an easy access account, savers can only make four withdrawals a year and will therefore need to monitor their withdrawals carefully to ensure they don't go over this. If they do, losing 90 days' interest on the amount withdrawn will be a heavy penalty to pay – particularly in a climate such as this where every penny of interest counts.

Those opening the account will also need to make a note that the fixed 0.55% bonus rate expires on May 31, 2014 and after this the interest rate will fall to 1.50%. At this point, you'll need to move your money to a new, better-paying, home.

Also remember that the interest rate on the West Brom account is variable – which means the building society could change it at any time. And the account can't be operated online – only by post or phone.

What's the verdict?

Overall, providing you can stump up the initial deposit of £10,000 needed to open the account, the West Bromwich Direct Bonus Account is a competitive option for anyone looking for new home for their savings.

And although penalty-free withdrawals are limited, the account is still a good option if you're not comfortable with tying up your money for a year or more in a fixed rate bond. What's more, it could encourage those who need to be a little more disciplined with their money not to dip in and out of their savings on a regular basis.

However, if you don't have £10,000 to invest, the Coventry Building Society Online Saver can be opened with £1 and pays 2.00%. The rate here includes a 0.40% bonus for 12 months and up to four withdrawals per year can be paid penalty-free.

Alternatively, the Skipton Building Society Online Bonus Saver also pays 2.00%, including a 1.00% bonus for 12 months, and can also be opened with £1. You can make unlimited withdrawals.

Top tip!

If you don't want to keep moving your money around every time the bonus period ends on your savings account, you might be better off considering an easy access account that is bonus-free.

For example, the Nationwide e-Savings Plus account pays an annual rate of 2.00% and there is no built-in bonus. The account can be opened with £1 but only five withdrawals a year are permitted. You will also need to be a Nationwide current account holder to qualify.

Alternatively, Manchester Building Society's Platinum Easy Access Account pays 1.81% and can be opened with £1,000. You can make up to six withdrawals per year. However, it can only be operated in-branch or by post so, if you want an online option, West Brom's WeBSave Plus pays 1.80% if you have a minimum investment of £1,000. You can make just one withdrawal per year.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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