High interest accounts usually have handcuffs

handcuffs tied to high interest account with limited access to your money

High interest in return for handcuffs

The highest interest rates are usually reserved for savings accounts which are for a fixed period, or allow only limited withdrawals and an interest penalty.

An example is Manchester Building Society which is paying 2.91 per cent on its 60-day notice account, including a 0.9 per cent bonus for one year.

Northern Rock has just launched a 120-day notice cash individual savings account (Isa) paying 2.8 per cent, including a one-year bonus of 1.5 per cent.

Providers will often offer competitive rates on this type of account as they have advanced warning of a withdrawal. Whether such an account suits you is a different question. You may be able to get access to the money in a hurry, but you lose interest. You may get more interest on a fixed term investment, but can you be sure the dreaded rainy day won’t come when your money is locked away.

Like everything else in life it is a balance between pros and cons.

The pros and cons are as ever in the small print. With the Manchester account, for example, only four withdrawals are permitted and while it does pay to take advantage of introductory bonuses, you do need to note when that bonus period ends. None of that is unusual, but you need to know up front, and this is one of many accounts offering an introductory bonus, but only short term. They hope your money will stay in the account beyond the introductory period when the interest rate drops. Pop the date the offer ends on your calendar, find the best rate, and move your money. It might be boring, but it isn’t hard work.

You earned the money so make it work for you..