Instant access accounts, bonus rates, tax traps and other tricks that can eat away at your savings

We reveal five savings mistakes that could leave you worse off in 2025.

With inflation remaining stubbornly high, we need to work hard to ensure we’re getting a decent return on our cash.

Sadly, not all so-called ‘market-leading’ accounts are as generous as they seem.

Behind some of the headline-grabbing offers lie restrictions and hidden catches that could leave you earning far less than you expected.

From an ‘instant access’ that isn’t, to sneaky bonus rates and potential tax traps, here are some of the most common savings tricks worth watching out for.

Classic savings mistakes: not switching, ignoring small banks & more

1. The myth of ‘instant access’

New research commissioned by savings app Spring found that nearly three-quarters of the UK’s top easy access savings accounts delay access to your money – in some cases by up to a full working day.

Of the top 30 easy access accounts:

• 73% either impose a cut-off time or fail to process withdrawals via the Faster Payments system, which makes transfers within two hours
• Half set a same-day cut-off time
• A third require withdrawal requests before 3pm to receive funds that day

This means many ‘easy access’ accounts are often anything but.

If you try to move your cash after the cut-off, it might not arrive until the next working day – a real issue for anyone who needs funds quickly, especially over weekends or in emergencies.

If speed matters, look for those that clearly state they use Faster Payments.

2. Bonus rates: too good to be true?

Bonus rates are one of the oldest tricks in the book.

Under this system, a provider adds a temporary boost to its rate for the first year, meaning it rockets up the best-buy tables – then quietly slashes your returns once the bonus period ends.

The key is to stay on top of when your bonus expires.

Try to set a reminder to move your money before this introductory rate ends, allowing you to move to another market leader.

Leaving it where it is could see your interest fall sharply, often to well below the market average.

Savings tricks to boost your pot: 1p challenge, round-up apps and more

3. The great rate that ties you in

Some banks and building societies advertise market-leading rates, but there’s a catch – you have to open or hold a current account with them to qualify.

This might not sound like a big deal, but it often means juggling multiple accounts or keeping minimum balances to avoid fees.

In many cases, the difference between the ‘linked’ and ‘standard’ rate isn’t as impressive as it initially appears.

Before committing, check whether the extra return is worth the additional admin.

A straightforward, standalone savings account offering slightly less interest could, in fact, prove far more convenient in the long run.

4. The tax-time trap

This one catches many savers by surprise.

Some long-term fixed-rate savings accounts only pay interest at maturity – meaning all the interest you’ve earned over several years lands in a single tax year.

If you’ve invested a large sum, this payout could push you over your Personal Savings Allowance (PSA), which is £1,000 for Basic Rate taxpayers or £500 for those in the Higher Rate bracket.

Anything above this amount could be taxed at your normal income rate, wiping out a chunk of your returns.

Luckily, you have a few options to avoid this tax shock:

• Choose a fixed-rate account that pays monthly or annual interest, spreading your payments over multiple tax years
• Opt for a Fixed-Rate Cash ISA, where all returns are tax-free
• Stick with shorter one-year fixes, locking in again each year to capture the latest rates while keeping your tax position simple

You can read more about this in our guide to avoiding the savings tax trap.

5. Hidden small print surprises

Even accounts with seemingly generous terms can come with conditions that trip you up.

Some limit how many withdrawals you can make per year or reduce your rate if you take out cash too often.

Others quietly stipulate a minimum balance to keep the top rate, meaning your interest could drop if your balance dips.

These details are usually buried in the small print, so it’s worth double-checking before you apply.

The bottom line

With interest rates finally back at levels that make saving worthwhile, competition is fierce – and so are marketing ploys.

The best deals often come with catches designed to make you overlook the fine print.

By keeping an eye out for these common tricks, you can make sure your savings work as hard as possible without any nasty surprises.