The savings market has recently seen a rise in the number of products offering an introductory bonus.
Research from Moneyfacts.co.uk has shown that in the last two years the proportion of accounts including a bonus has increased from 12.7% to 19.8%, with the average bonus size more than doubling from 0.61% to 1.26%.
While rates for products with introductory bonuses are certainly appealing, savers need to bear in mind that when the initial period expires, the rate will fall resulting in a lower return on their funds.
Here are the current top three savings products offering introductory bonuses.
West Bromwich Building Society – Branch Bonus Account 2
This account pays an annual rate of 3.35% including an introductory bonus of 0.60% until 31st October 2010. A monthly interest option is also available at a lower rate of 3.30% until the same date with a bonus of 0.58%. Savers can invest between £100 and £100,000. Funds can be accessed instantly, although only two withdrawals are allowed each year. Upon the third withdrawal, a rate of 0.65% is paid until 31st October 2010, after which 0.05% is paid until 1st April when a new account year starts and the rate reverts to the headline rate. There is no restriction on savers age, the account can only be operated in branch with a passbook.
Citibank – Flexible Saver Issue 6
This account pays a rate of 3.25% including an introductory bonus of 2.25% for 12 months. Interest is paid monthly on the date when the account was opened. Investments range from £1 to £1 million. The account is open to new customers only. Funds can be accessed instantly. Savers must be aged 18 and over and the account can be operated in branch, by telephone or online.
Bradford & Bingley – Notice Saver Online
This account pays a rate of 3.30% including a variable introductory bonus of 2.80% for 12 months. A monthly interest option is also available at a lower rate of 3.25% with a bonus of 2.75% variable for 12 months. Savers can invest between £1,000 and £2 million. 60 days' notice must be given to access funds. Early access is allowed, although this is subject to 60 days' loss of interest. All withdrawals must be made via BACS to a nominated account. The account can be operated online only by savers aged 16 and over.
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 Any products featured may be withdrawn by their provider or changed at any time.
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