Review of the week: New market-leading savings account

Interest rates on easy access accounts have remained stagnant for some time now, with the average rate of the top 5 accounts fluctuating between 2.75% and 2.76% since August this year.

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We are still a long way from the top average of the year which was 3.04% back in January, although NatWest has just given the market a much-needed kick start with its improved e-Savings account.

The e-Savings account is currently paying a rate of 2.89%, making it the market-leading easy access deal, but how does it stack up against its rivals when it comes to the small print?

Read on to find out more….

What’s the deal?

NatWest has re-launched its e-Savings account with a market-leading headline rate of 2.89%.

Savers can open an account with just £1, and there are none of the hidden withdrawal restrictions that many banks adopt which makes this a true easy access account.

Due to this being an e-Savings account, you can only gain access to your funds online. You do not have to be an existing NatWest customer to open or carry out transactions on the account.

Any catches?

The 2.89% rate is fixed for a year and includes a 1.85% bonus that ends after 12 months. After that the rate reverts to a less impressive 1.00%, so you should be prepared to switch your savings then.

For existing NatWest customers the account can be opened immediately. However, those who are new to the bank may have to wait up to 3 weeks for the account to be activated, depending on how long it takes to prove your identity.

This is an online-only account with no access to branches, so for those who aren’t confident with carrying out transactions via the internet, it may not be suitable.

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Verdict

Not all savers are in a position to lock away their funds or to place restrictions on the number of withdrawals they wish to make and at present the best rates are reserved for those who are able to be a bit stricter with their savings pot.
 
Those who require a straightforward easy access account have been struggling to net a decent return. To see a deal enter the market that is not only simple and straightforward to use but which also offers a market-leading rate is encouraging.

Hopefully this will stir up competition in the easy access market, giving this sector of the savings arena a much-needed boost.

Top Tip

Although the underlying rate on the e-Savings account is 0.50% above the current base rate, there is no way to predict what the interest rates will be doing in a year’s time. 

With 4 out of the top 5 easy access rates featuring a bonus that boosts the underlying rate, it is imperative for savers signing up for this account to keep a close eye on rates in a year’s time when the bonus disappears.

If the account looks uncompetitive at that time, you must be prepared to move funds over to an account paying a higher rate of interest.

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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