The highest savings rates currently on offer are masked behind the “weasel words” of conditional bonuses, an expert has warned, with penalties that can slash the rate by more than half.

New analysis by comparison website Mozo, published on Monday, found that only three institutions currently offer “ongoing” savings rates of 3 per cent, following 10 rate cuts since July 1 alone.

The comparison website’s definition of “ongoing” is that the rate is available indefinitely, as opposed to a honeymoon rate that expires after an introductory period.

However, the 3-per-cent trio – RAMS, AMP and AustralianUnity – are actually selling “bonus” rates that are difficult to qualify for.

A bonus rate is an additional percentage added on top of the base rate. Importantly, the bonus is forfeited in full for every month the saver fails to meet certain conditions.

Forfeiting the bonus can more than halve a month’s return, dropping the rate to among the worst on the market. So you can go from best to worst very quickly.

Financial literacy expert Nicole Pedersen-McKinnon, a qualified adviser who teaches money skills to high school students, warned savers to be wary of “disgraceful” bonus rates that “forfeit everything” if conditions are not met.

“The weasel words consumers need to be on the look out for are ‘base rate’ – they mean you may never see anything like the number promised in lights,” she told The New Daily.

“You’re getting a so-called bonus rate for jumping through a designated number of hoops every month. If you fail to do that, you’ll drop right down to a level that can be absolutely paltry.”

For example, RAMS pays 3 per cent only if you deposit at least $200 a month and make no withdrawals. AustralianUnity requires $250 a month with no withdrawals, while AMP demands a whopping $2000 in monthly deposits, although you can take out money.

If a saver fails to meet these conditions, the rate drops back to between 1.2 and 1.5 per cent – much lower than the 2 per cent offered by the market-leading base rates.

The worst offenders slash bonus rates to zero if deposit and withdrawal conditions are not met.

Several also offered ‘honeymoon’ deals that only lasted for a few months before the bonus rate – if you can qualify for it – dropped even lower.

Ms Pedersen-McKinnon, founder of The Money Mentor Way, urged savers to be “really careful” of onerous conditions and hefty penalties.

“On some accounts, you virtually have to hand over your first born to qualify for the big number,” she said.

“What in fact you might find is that each month you’re getting something way down at not even 1 per cent.

“If that’s the case, you should be opting for a different account in the first place.”

The latest official Reserve Bank data, which dates to July, showed that the average bonus savings account promised 1.9 per cent a month, while the average non-bonus account paid 1.65 per cent.

Inflation is currently at 1.9 per cent a year, which means many savings accounts are failing to keep pace with the rising cost of living.

However, Mozo director Kirsty Lamont said the “proliferation” of introductory honeymoon deals that expire were “more of a problem” than ongoing bonus rates.

“These are not introductory rates that only last for a couple of months. These are ongoing bonus rates that customers can access assuming they meet certain conditions,” she told The New Daily.

“It’s only worth signing up for these accounts if you’ve read the conditions and you’re sure you can meet them. They aren’t going to be for everyone, which is why it’s important that people always check the terms and conditions before they sign up.

“It’s only a concern if the conditions are so stringent that it’s very hard for people to meet them.”