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Five minute focus: Savings

Five minute focus: Savings

Category: Savings

Updated: 15/02/2010
First Published: 15/02/2010

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 It is now over 6 months old so the content may be out of date.

The savings market has been extremely active in the last week as providers continue to make changes to existing products and/or launch new accounts. Unfortunately for savers, most of the changes made to accounts are negative ones as the trend of reducing fixed rate bonds continues.

The continuing ISA season is the only ray of sunshine in the savings gloom as providers large and small announce new products in order to attract savers' tax free allowances. Now that ISAs are more than a decade old, many people have built up significant tax free savings and providers are increasingly wanting to attract the funds from their competitors. So much so that the percentage of accounts accepting transfers in has steadily risen from 74% five years ago to 90% today.

first direct tempts savers

This week sees first direct increasing the rate on offer on its Cash e-ISA. The account now pays a fixed rate of 2.75pc until 31 August 2011, after which a variable rate becomes payable, currently 0.20pc. Savers can invest from £1 into the ISA, which accepts transfers in. No notice is required to make a withdrawal from the account, which can be operated online, by telephone or post. At the same time, first direct has also launched its Fixed Rate Savings Bond paying 2.75pc until 28 February 2011, into which savers can invest between £2,000 and £49,999.

New bonds from Birmingham Midshires

Birmingham Midshires has just launched two new fixed rate bonds paying 4.50pc. The first is a postal operated account, while the second is operated online. Savers can invest up to £10m into the accounts, with further additions permitted whilst the issues remain open. A monthly interest option is also available for those looking for a regular income. Earlier access is available subject to a loss of 270 days' interest in year one, of 180 days in year two and 90 days in year three.

This isn't just any ISA, it's an M&S ISA

Marks & Spencer Money has just launched its Flexi Cash ISA paying 2.65pc, including a 1.25pc bonus for 18 months, a market leading rate for those looking for easy access to their ISA money. The account is operated by post or telephone and savers can invest from £100 into the account, which accepts transfers in. No notice is required to access funds, but all withdrawals must be made via a nominated current account.

Find the best savings accounts for you - Compare fixed rate ISA or
compare cash ISAs

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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