Product focus: Best of the best

Category: Savings
Date: 7/19/2010

Inflation continues to stand higher than the Governments target level and, in this low interest environment, savers are struggling to find a positive real return as both inflation and tax eats into the effective interest that they earn.

Savers worried about the effects of inflation could of until today turned to the National Savings and Investments Index Linked Certificates, which paid 1%, plus the level of the Retail Price Index, but these bonds have now been withdrawn.

Although there are no longer any cash savings products directly linked to inflation, there are a number of competitive deals.

Best for easy access

The Internet Extra Account from the AA pays 2.80%, including a 2.30% bonus for 12 months. Savers can invest between £1 and £1 million into the online operated account, which is run by Birmingham Midshires. No notice is required to make a withdrawal, but all transaction must be made via a nominated account.

Best notice account

Close Savings is offering a market leading rate of 3.11% on its Premium Gold 180 Day Notice account. Savers can invest between £10,000 and £1m into the account, which is operated by post or telephone. If the balance falls below £10,000 then a rate of 0.50% becomes payable. Savers must give 180 days' notice to access funds, earlier access is not permitted.

Best cash ISA

Birmingham Midshires is offering a rate of 4.25% on its 5 Year Fixed Rate ISA. For savers requiring a regular income a monthly interest option is available. Savers can invest upwards of £1 into the account, which accepts transfers in. Further additions are permitted whilst the issue remain open. Access is available during the five year term, but a penalty of a loss of 365 days' interest will be payable.

Best bond

The HiSAVE Fixed Rate account from ICICI Bank UK offers some of the most competitive fixed rates on the market. Savers prepared to commit funds for five years will receive a market leading rate of 4.75%. Savers can invest upwards of £1,000 into the online operate bond. Once opened, earlier access and further additions are not permitted.

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