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Five minute finance: Savings & Investments

Five minute finance: Savings & Investments

Category: Savings

Updated: 19/05/2010
First Published: 17/05/2010

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 It is now over 6 months old so the content may be out of date.

The ISA season appeared to have come to an abrupt end last week as a number of competitive deals were withdrawn or saw rates cut.

So much so, that the average ISA rate has fallen from its 14 month high of last month, to the lowest level since August 2009.

Fixed rate bonds also continue their downward trend, but the rate of decline appears to have eased. In fact a number of competitive deals across the savings arena have been launched this week, welcome news for savers.

The indecision over the final make up of this Government and concerns about selected European Union economies has meant the money markets remain volatile.

This means demand for savers' money to fund lending activities remains high and there is now real talk of bank rate increasing this year, which would be a real boost for savers.

First class account

Coventry Building Society has relaunched its market leading 1st Class Postal account paying 3.00%, including a 1.00% bonus for 12 months. Savers can invest between £1,000 and £250,000 into the account, which has a monthly interest option available for savers requiring a regular income. No notice is required to access funds and savers can make four penalty free withdrawals per annum. Any subsequent withdrawals will be subject to a loss of 50 days' interest.

Sit up and take notice

If savers don't need instant access to their money and can give a small amount of notice then Close Savings, part of the Close Brothers Group plc is offering one of the highest variable rates on the market. Its new Premium Gold 180 Day Notice account pays 3.15% on balances of between £10,000 and £1 million. If the balance falls below £10,000, 0.50% interest is paid. As the name suggests, savers must give 180 days' notice to access funds, as earlier access is not permitted.

Best buy bonds

The Post Office has just launched new issues of its Growth Bonds, including a market leading one year bond paying 3.00%. Savers after a longer term commitment can opt for a two year bond paying 3.70% or a three year bond paying 4.10%. Between £500 and £1 million can be invested in the bonds, which are run by Bank of Ireland, but further additions are not permitted after the initial investment. Savers should ensure they won't need their money during the term as once open earlier access is not permitted.

Online savers boosted

West Bromwich Building Society has this week launched its WebSave Bonus account paying 2.85%, including a 1.00% bonus until 28 February 2011. A monthly interest option is available for savers seeking a regular income. Between £1,000 and £1 million can be invested in the online operated account, which is open to savers bringing new money to the provider. No notice is required to access funds, but all withdrawals must be made via a nominated account.

Morgan Stanley offer unlimited growth

Morgan Stanley has launched its FTSE Tracker Plus Plan 3, which offers investors uncapped accelerated growth of the FTSE 100 Index over the six year term of the plan. The plan has a deceleration feature, which only exposes investors to a fifth of any negative index performance. Savers can invest from £3,000 into the plan, which is available until 15 June 2010. If investors wish to open the plan in an ISA wrapper they must open the account by 8 June 2010.

Find the best savings rates for you - Compare savings accounts

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.