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Five minute finance: Savings

Five minute finance: Savings

Category: Savings

Updated: 30/11/2009
First Published: 14/09/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Easy access savings have long been the preferred choice for savers, who favour the peace of mind that they can obtain their money when they need to. However, with more than half or variable rate accounts paying base rate of less, more savers have been seeking out alternative options to make more of their money.

Rates on fixed rate bonds continue to be around 2.00pc higher than those available on easy access accounts, so it comes as no great surprise that today they are the most sought after account for savers. Latest data shows that in August, 37pc of savers were looking for a fixed rate account, up from 29pc at the start of the year. By comparison, those looking for easy access have declined from 32pc down to 27pc.

Savers have come to realise that putting their money in an account and forgetting about it for a while could cost them dearly. Instead they are being more proactive in making sure they regularly review their savings needs.

Top rates for branch access

Savers looking for a branch based account could consider the new Albion Saver account from Leeds Building Society. Savers can invest between £2,500 and £1m, with rates of between 1.60pc and 2.50pc payable depending on the amount invested. The account comes with a passbook and savers can make unlimited withdrawals without notice or penalty.

Reserve yourself a top rate

The Chesham Building Society has just added the Reserve 120 to its range of savings account, paying 2.85pc. Savers can invest between £5,000 and £400,000 into the account, which has a monthly interest option for those looking for a regular income. If access to funds is required, savers must give 120 days' notice or forego 120 days' interest for earlier access.

Head online for top rates

The launch of the Online Saver from Sainsbury's Finance is its second new top paying account in as many weeks. The account pays 3.00pc, including a 2.50pc bonus for 12 months, providing no more than three withdrawals are made per annum. If savers make more than three withdrawals, the account pays just 0.50pc. Savers can invest between £1,000 and £500,000 into the account.

Leek United steps up the pace

Leek United Building Society has just relaunched its Three Year Escalator Bond paying 3.00pc in year one, 4.00pc in year two and 5.00pc in year three. Savers can invest between £1,000 and £250,000 into the bond, which is operated in branch or by post, but further additions are not permitted. Access to funds is not available in the first year, but is available in years two and three, subject to 90 days' loss of interest.

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.