UK savers' millions locked into accounts paying poor rates as banks become desperate for cash

By Dan Hyde

PUBLISHED: 22:52 GMT, 8 May 2012 | UPDATED: 08:35 GMT, 9 May 2012

Legions of savers are being trapped on pathetic rates after falling prey to banks and building societies desperate to hold on to their cash.

Millions of pounds has been left languishing on these poor deals with savers unable to touch their cash for up to four months because of the terms of the account.

Banks and building societies are desperate for savers’ cash to fill their coffers. Other sources of funding — such as using the investment money markets — have dried up, and rule changes are forcing banks to back up the loans they make with more of savers’ money.

The problem is customers are becoming increasingly savvy, and will move their money from a poor deal at the earliest opportunity. To combat this, banks and building societies are trying to manufacture loyalty by banning savers from getting to their money.

They are using three key tricks to bully savers into keeping their money at a bank:

• Hundreds of accounts demand up to four months’ notice if you want to get at your cash;
• More than 70 new deals permit just a handful of withdrawals each year;
• Some so-called ‘easy-access’ accounts actually clobber savers with harsh penalties when they dip in to their funds.
  

FULL STORY: http://www.dailymail.co.uk/money/saving/article-2141427/Savers-mill...