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Five minute finance: Savings

Five minute finance: Savings

Category: Savings

Updated: 06/04/2010
First Published: 06/04/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Compared with previous years, the 2010 ISA season has been a much quieter affair. While there has been competition amongst some providers to attract savers' money, we have not witnessed the furore seen in previous years, when some providers increased rates more than once in order to top the best buy tables.

From today, the amount savers can invest tax free in an ISA increases from £7,200 to £10,200, with the cash allowance increasing from £3,600 to £5,100. Many savers will look to invest their tax free allowance early at the start of the new tax year and normally we would see a number of moves by providers to capitalise on this. However, as yet this has not materialised.

After seeing a string of best buy deals withdrawn in recent weeks, the variable savings market now appears to have stabilised. However, the same cannot be said for the fixed rate bond market. Rates have continued to fall, particularly on shorter term deals, as providers attempt to attract savers into making a longer term commitment.

The names Bond, eBond

Savers looking to fix the return they receive on their savings are being offered a rate of 4.10pc by Lloyds TSB on its eBond. A monthly interest option of the online operated bond is available for those looking for a regular income. The bond has a three year term and savers can invest between £2,000 and £1m. Further additions can be made whilst the issue remains open, but access to funds is not permitted during the term.

Top paying easy access accounts

West Bromwich Building Society is currently offering two market leading easy access accounts. The Branch Bonus and Direct Bonus accounts both pay 3.00pc and include a 1.00pc bonus until 31 January 2011. Savers can invest between £1,000 and £100,000 into the accounts, with a monthly interest option available for those looking for a regular income. While no notice is required to access funds, if more than three withdrawals are made per annum then a rate of 0.05pc (1.05pc during bonus period) will be paid until 1 April, when a new year begins. As the name suggests, the Branch Bonus account is operated in branch, while the Direct Bonus is operated online, by post or telephone.

Post Office top of the pack

The Post Office has announced that it is to start offering products through its extensive branch network. The Post Office currently has a range of competitive savings accounts, which savers will be hoping become available in branch. Paying 3.30pc for one year, 4.05pc for two years and 4.40pc for three years, its Growth Bond is one of the market leaders. Between £500 and £1m can be invested in the bonds, but further additions are not permitted. Access during the term is available on closure only and will be subject to a breakage charge.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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