Simon Read: High-interest to no interest: why the best-buy deals stink

Look, what I want from my savings account is simple. I just want to know my cash is safe, is available when I need it and is earning a decent rate of interest.

You may want more. Plenty of people want to squeeze the maximum they can from their rainy day cash. They want their money to work hard for them which means they will devour the best-buy tables, and switch savings accounts the minute a better deal comes along.

That’s fine for those that can spare the time and be bothered to make the constant effort to maximise returns. But the rest of us – and I believe we’re a majority –want to find a safe home for our savings and leave our cash there until we need it.

I did that for years until relatively recently when one day I checked my annual statement to discover the interest added over the previous 12 months was negligible. In fact I think it was less than a quid on a balance approaching £1,000.

Confused? You bet I was! In fact behind my back the interest rate paid had been slashed to 0.1 per cent. The account was called Gold or Premier Savings or some such marketing garbage and had been sold to me as a market-leader.

But once my cash was safely locked away, the savings institution – it was LloydsTSB, to be honest – simply slashed the rate and left my nest egg to rot. Lloyds is far from being the only bank or building society to play the game. All of them turn good accounts into worthless ones over time purely – as far as I can tell – to avoid paying reasonable returns to customers.

In fact, over recent times things have got even worse with all of them playing the bonus game. That’s when they launch an account with a great interest rate but which, in fact, is mostly made up of a bonus which is abruptly snatched away after a set time, leaving your savings earning practically nothing.

What can you do to get a reasonable return that you don’t need to keep checking? I put the question to expert Anna Bowes, pictured, who is a director of an online site which monitors the UK’s many different accounts and bonds. She says: “To earn the best rates of interest, savers have to jump through complicated hoops; from bonuses to withdrawal restrictions to even using some current accounts as savings account in order to get a decent return.”

In short, there’s no safe, simple home. So what should we do? Check the terms and conditions, advises Anna. “It’s important to understand the rules of the account you’re applying for, otherwise you may be unable to get at your money without your rate plummeting.

“For instance, some so-called easy-access accounts only allow one or two withdrawals before the rate drops heavily. Other accounts offer short-term bonuses that guarantee the rate will fall, to as little as 0.1 per cent, at the end of the bonus term.”

You can find out the latest savings rates and deals at Anna’s website at savingschampion.co.uk.

Looking ahead, are there any signs of change? Will institutions return to offering us fair accounts? James Blower, director of savings at Shawbrook Bank hopes so.

“We believe the UK savings market needs to start treating depositors a bit more fairly,” he says.

The bank says it is backing up that view by playing fairer with savers.

“We don’t offer bonus rates or gimmicks, but just focus on simple, consistently good rates,” says Mr Blower. “We think fair treatment for savers is common sense.”

If only others thought the same. I’ve pushed some of the mainstream savings institutions to scrap bonuses and other tricks but they say that if they do, they will lose competitive advantage to their rivals. If even one major bank or building society continues to play the bonus game, they all will.

The problem is it works. When someone seeks a home for their savings, it’s natural to pick the account which pays the highest rate. However, that’s got to change, Mr Blower believes.

“It takes a sharp eye to read through the small print to work out which savings account is the best one for you. Why should it be so difficult to establish whether the account you are trusting with your hard-earned deposits is going to plummet without warning?”

Why indeed!