Introductory bonus - friend or foe?

An increasing number of savings accounts are offering introductory bonuses in order to get into best buy tables and attract retail funds.

In many cases, the bonuses offered are getting larger with some now as high as 2.00%.

Currently there are 134 savings accounts offering introductory bonuses, according to Defaqto.

The question for savers is whether it's worth taking advantage of them.

David Black, Principal Consultant for Banking at Defaqto, said "With the bank base rate so low it now makes sense to have a look at the accounts offering an introductory bonus provided that savers follow the golden rule of putting a reminder in their diary for around the time that the bonus ends so that they can look around for a suitably competitive alternative savings account. It's important to note that under the Banking Code providers don't have to notify the saver that an introductory bonus is about to end provided that the terms of the bonus have been clearly communicated."

"Astonishingly there are 14 savings accounts that have an introductory bonus equal to, or greater than, the current Bank of England base rate of 1.50%. Savers might like to consider taking advantage of this largesse given that these accounts also pay an underlying interest rate as well."

"As always it is important for savers to study the terms of the account as some accounts may limit the number of withdrawals permitted and with some accounts the introductory bonus may also be conditional."

It's not just instant and easy access savings accounts that offer introductory bonuses. Aside from the 80 instant/easy access accounts there are also 28 notice accounts, 22 Cash ISAs, 3 regular monthly savings accounts and 1 current account that currently offer introductory bonuses.