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Five minute finance: savings

Five minute finance: savings

Category: Savings

Updated: 22/03/2010
First Published: 22/03/2010

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 It is now over 6 months old so the content may be out of date.

Savings account providers like to include temporary bonuses as part of the rate offered to savers for two reasons: firstly, it increases the headline rate; and secondly, it means the rate lowers, and therefore becomes cheaper, once the bonus period ends.

With the onus on the saver to remember to review the rate when the bonus period expires, it comes as little surprise that many forget to do so and end up languishing on a less than competitive rate as a result.

Bonuses can be a good way to achieve a higher than average rate, but savers need to ensure they make a note to check whether a better deal is available once the bonus period is over.

A competitive rate – guaranteed!

Savers looking to ensure they get a competitive rate may wish to consider the High 5 account from Investec Private Bank. The account guarantees to pay the average of the top five variable rate accounts on each week, currently 3.11pc. Savers can invest upwards of £25,000 into the account, which is operated online or by post. If a withdrawal is required, savers must give three months notice. Earlier access is not available.

Beat inflation with NS&I

This week has seen National Savings and Investments (NS&I) launch new issues of its Index Linked Savings Certificates. The accounts pay 1.00pc plus RPI and savers can opt for a three or five year commitment. Between £100 and £15,000 can be invested into the accounts, with reduced interest paid if it is not held for the full term.

NPBS offers market leading rates

Norwich & Peterborough Building Society has launched a market leading fixed rate bond, requiring just a six month commitment. The online operated account pays 3.05pc and savers can invest between £1,000 and £1m. The account is available to savers investing new money with the provider. However, once opened, earlier access and further additions are not permitted during the six month term.

Best buy bond

Coventry Building Society has launched its Call Save Two Year Fixed Rate Bond paying a best buy rate of 4.00pc. Savers can invest up to £250,000 into the account, with a monthly interest option available for those looking for a regular income. Further additions are permitted whilst the account remains open, but access is not available until the bond matures on 30 April 2012.

Find the best savings account for you - Compare best selling 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.