Big-bonus savings accounts fade after a year, sparking switch warning

A growing cohort of high-rate easy-access savings accounts is front-loading large bonuses that last only a few months. The effect, according to Sylvia Morris, This Is Money and Daily Mail Savings expert, is that savers can earn attractive returns if they move funds before the bonus ends, but if they stay, their money can be steered into much poorer deals after about a year. The trend has left readers with a clear caveat: the apparent top rate may shrink dramatically once the initial bonus expires, eroding potential gains for those who fail to switch in time. Morris notes that the structure makes these accounts complex for ordinary savers, requiring regular monitoring and action to preserve returns. The accounts are not inherently bad, but the big-to-long-term math behind them can be misleading if the time horizon is not understood.

Examples illustrate the pattern. Shawbrook's Bonus Easy Access Savings Account pays a near-top rate of 4.3% for six months, then falls to 1.5%, yielding an expected 12-month average of about 2.9%. Oxbury Bank's Easy Access Bonus Base Rate Tracker 1 similarly front-loads a 4.36% package with a bonus lasting up to three months. Cahoot Simple Saver advertises 4.4% with an equivalent bonus of about 3.4% for 12 months, after which the Cahoot Savings Account pays 1%. Post Office Online Saver offers 4.13% with a 3.13% bonus for a year, then 1%. Tesco Bank's Internet Saver is priced at 4.2% including a 3.15% bonus; after 12 months the rate drops to about 1.05%. These patterns show a common theme: high headline rates are often tied to limited, time-bound bonuses rather than sustained yields.

These accounts are often marketed as easy-access but impose withdrawal limits or restrict access. Nationwide has long operated the 1 Year Triple Access Online Saver and its Isa equivalent, offering 3.5% for 12 months with three withdrawals; after that, savers default to an ordinary easy-access product at around 1.1%. Coventry Building Society has followed a similar model with its 5 Access Saver 1 Year and 5 Access Isa 1 Year at 4.15% with five free withdrawals, before moving to an easy-access version at 2.2% after a year. The pattern is clear: the initial high rate is temporary, and the post-year rate can be substantially lower, sometimes by more than half.

I don’t include bonus accounts or those with restricted withdrawals in the star buys table. If I did, there would be no room for those that pay a consistently good rate. But I do keep you informed of what is on offer. The upshot for savers is that the best short-term deal can quickly become a less favorable one if the balance remains in place after the bonus expires.

For households weighing these products, the takeaway is straightforward: calculate the total return over a 12-month horizon, not just the headline rate, and be prepared to switch again when the bonus period ends. Sizing up the real-world value requires tracking the exact withdrawal terms and the transition path from the bonus-containing product to a standard savings account. While the market remains competitive, the burden of ongoing monitoring falls on the saver, who must decide whether the potential extra income from a big early bonus justifies the effort and timing of multiple account moves over the year.

Overall, the savings landscape continues to feature high-visible yields offered for short windows. Savers should compare total annualized returns, including how many withdrawals are allowed in the bonus period and what rate applies after the first year. By planning ahead and staying vigilant on terms, households can preserve gains while avoiding the trap of a post-bonus downgrade.