Watch out for this savings trap!

We show you why in the savings market, loyalty never pays...

About a year ago, I applied for a savings account which paid the juiciest rate on the market.

I felt quite smug at the time, and thought I could relax in the knowledge that I would enjoy the juicy rate for at least a year.

But that smile was wiped off my face just six months later when a different 'issue' of exactly the same account launched with a higher rate.

When I called to see if I could get that rate, I was told it was open to brand new customers only.

Annoyed and angry, I switched my account.

Providers in the dock

This practice of tempting new savers in while leaving existing savers out in the cold is becoming increasingly common.

As Rachel Robson recently highlighted, many of the best accounts last year have tumbled back down the best buy tables, as providers slash rates significantly in the hope that you'll be too lazy to move your cash.

Add that to the fact many savings accounts now come tied with a year-long bonus, and you can see how providers are offsetting juicy rates with more and more catches.

But while the flood of bonus rates and short term solutions has created a new breed of savings rate tart, according to financial research company Defaqto, there is a worrying trend emerging from this 'brand new customers only' practice.

Providers will let you open a new account, but only if you deposit 'new money' - or funds not already held with that particular provider. Sneaky!

Here are some of the worst offenders:

Source: Defaqto

Both Citi and its sister bank Egg do not allow you use money from existing savings to fund the new accounts.

In Citi's case, you also have to be a brand new customer if you want to qualify for the Flexible Saver issue 5 bonus rate. As an existing customer, you'll only earn the standard rate of 1%.

It's a similar story for some bonds on offer. For example, if you wanted to stash your cash in Stroud and Swindon's E-Bond Issue 8 and were an existing customer, you'd need to find £2,000 of new cash to qualify.

Another persistent offender of the brand new customers only trap is ING. It currently offers a guaranteed rate of 3% AER on its instant access savings account.

But, you guessed it, only new customers get this rate, and if you're a long suffering existing ING customer, you'll only earn 0.5% AER on your savings.

ING says that it does offer special deals to its existing customers, as well as its new ones - so, if you're hopeful, keep an eye on your letterbox.

Hunting for rates

Thankfully, the offending accounts mentioned are not the current best buys, and there are better accounts out there with fewer catches.

The best easy access account at the moment is Coventry Building Society's 1st Postal account, which pays 3.3% AER on balances from £1,000.

But as I highlighted in Avoid the top two savings accounts, the top paying account isn't always the best for your cash, and this account has more penalties than it does benefits - particularly when it comes to withdrawing your cash.

I'd rather choose the Birmingham Midshires Telephone Extra Account, or the Online Saver Issue 5 account from Alliance and Leicester, which both pay 3.15% AER (including 12 month bonuses of up to 2.65%), and more importantly don't have the catches associated with the other examples.

Both new and existing customers can apply, and there are no restrictions on where the accounts are funded from. Read more about the ins and outs of these accounts in Get the best rate on your savings.

Whether you're a new customer or old, the most important thing to keep an eye on is the interest rate you're getting. Savings account providers may be getting more sneaky when it comes to catches on your cash, but as long as you keep your eye on the ball, there's no reason why you can't beat them at their own game.

More: Earn 8.2% on your cash | Ditch these best buy savings accounts!