Email to a friend

Savings accounts bonanza, but watch the small print

The level of competitiveness for savings accounts shows no signs of slowing down. In the last couple of weeks we have seen the launch of many competitive new deals for internet savings accounts and the ever popular over 50s savings accounts.

When you think of an internet savings account, like most online-based products and services, you automatically think of it as something that is easy to access and use on a frequent basis. Whilst the same is broadly true for internet savings accounts, just because a savings account is available via the internet doesn't mean that it will always offer these features.

Article continues below

Abbey's new eSaver Direct savings account offers a tempting 6.40% from £1. The interest rate includes a 0.40% bonus that is only available for the first 12 months and if you make a withdrawal, you receive no interest on your entire balance for the whole month in which you make a withdrawal!

Similarly, Halifax's Web Saver Extra savings account pays 6.25% on balances up to £100,000. You need to be aware that you can make one withdrawal each year with this savings account and any further withdrawals and you lose 30 days interest.

So whilst you'd assume that an internet savings account is an account you can regularly dip in and out of, these latest two offerings from two of the High Street's bigger names will only be an attractive proposition if you are a serious saver and looking to leave your money untouched for the medium term. However, if longer-term savings are what you really want, there are rates of up to 7.00% available with London Scottish Bank on a one-year bond.

Savers aged over 50 have reason to smile with two new product launches targeted at their age group. Stroud and Swindon BS is offering 6.50% gross on its Platinum 50 Saver issue three, but bear in mind that the rate includes a bonus of 0.9% for the first six months, which then reduces to 0.45% for the following six months. Hot on its heels is the Online Freedom 50 account from Leeds BS, paying a competitive 6.45% gross, but again please note that the rate includes a bonus element of 0.7% until 30 April 2008, when it is cut to 0.35% for a further six months.

Best buys - Internet savings accounts

Best buys - Fixed rate savings accounts

Best buys - Over 50s savings accounts