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Five minute finance: Savings & mortgages

Five minute finance: Savings & mortgages

Category: Savings

Updated: 04/05/2010
First Published: 04/05/2010

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 It is now over 6 months old so the content may be out of date.

Despite low cash savings rates many consumers are placing a higher priority on putting money aside. Tighter credit conditions have meant that many people have had to save for purchases, while rising unemployment has meant savers have had to acknowledge the importance of having a contingency fund should the worst happen.

A survey released this week by John Gilbert Associates showed a four year high in the savings and investments intentions of consumers, with the number of people looking to put money aside or repay existing debt increasing by 800,000 to 40.2 millions. A separate report from the British Bankers Association also showed a continued rise in the level of savers deposits.

Despite the resurgence in demand, savers are not seeing the benefit from providers as the general trend for rates continues downwards. While there are competitive deals on the market savers may have to put more time and effort into finding one that matches their needs.

Savers take note

Manchester Building Society has launched a market leading deal for savers prepared to give notice before accessing their savings. The 9th Issue of its Premier Notice account pays 3.06% including a 0.25% bonus for 12 months. Savers bringing new money to the provider can invest between £1,000 and £50,000 into the account. A maximum of four withdrawals are permitted per annum and savers must give 60 days notice to access their money.

Top returns from Nationwide

Similar to its competitors Nationwide Building Society has this week moved to cutting its fixed rate bonds. However, despite a 0.25% cut in the rate its Four Year Stepped Rate Bond remains one of the most competitive rates on the market. The account pays 3.50% in the first year, 4.00% in the second, 4.50% in the third and 5.00% in year four. Savers can invest between £5,000 and £2m into the branch based account. If access is required during the term of the deal the account will be closed and a 320 days' loss of interest penalty will be payable.

Cater Allen steps-up

Cater Allen Private Bank has just launched its Guaranteed Step-Up Income Plan offering a guaranteed minimum income totalling 6.75% on the initial investment. The account tracks the FTSE 100 index and offers an annual bonus based on the growth of the index, which increases the potential maximum return to 36%. The plan has a six year term and requires an investment of between £10,000 and £1m.

Get paid to switch

Alliance & Leicester, part of the Santander Group has this week reintroduced its £100 switching incentive for customers who switch to its Premier Current Account. No agreed overdraft charges are payable for the first year, after which the account charges 50p per day, maximum £5 per month. Customers taking out the account will also benefit from free European travel insurance as well as access to preferential financial deals. Those after a wider choice of benefits with their account might like to consider the Reward Current Account from Santander, which offer £460 worth of benefits for just £5 per month for the first three months. This half price monthly fee offer comes to an end on 2 May, so customers need to act fast.

Best buy mortgages

Britannia and The Co-operative Bank have become the latest lenders to offer mortgages to those with just a 10% deposit. The lenders have launched a range of market leading deals including a two year fixed at 5.49%, a five year fixed at 6.09% and a three year tracker 4.49%. A £999 arrangement fee is payable, although a non fee option at a slightly higher rate is available on the fixed rate deals.

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

Find the best mortgage for you - Compare best selling mortgages

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.