easy access savings account

[Ecosseven]

Evening all,

I have around £17k I want to invest in an easy access savings account. There appear to be two types on offer.

1. A flat rate, usually around 2.5 - 2.6%
2. A flat rate with an annual bonus, usually between 2.6% and 3.1%.

Can someone explain how the bonus usually works? I'm assuming that it is only payable after 12 months and on the lowest account balance during this period?

Thanks.

[SO27]

What happens is that you're paid the interest at the higher rate for the first year (or whatever the bonus period is) then the rate reverts to some measly value like 0.5%. The interest is usually calculated daily on your full balance.

So the practice with bonus rates is to move your money to another account with the best rate when the bonus period expires.

[Ecosseven]

Ah, I see. Thanks very much.