Savings market hots up

Commenting on significant savings developments from RBS, A&L and Anglo Irish Bank, Kevin Mountford, head of banking at moneysupermarket.com, said: "They say every cloud has a silver lining and out of the chaos of last week comes excellent news for savers. The market really is hotting up and the latest offerings from the giant Royal Bank of Scotland - including a cash ISA paying a table-topping 7.25 per cent for some - reflect the ongoing desire of institutions to fight hard for retail savings.

"The interesting thing to note is that RBS doesn't usually compete too hard on rates, but its latest suite of products breaks that mould. The cash ISA - whose top rate is valid for a year for those who transfer at least £24k from a rival ISA - is likely to be popular among existing ISA savers looking for a leading rate. The offering won't be as attractive to people new to ISAs though, as its top rate for them will be no more than 4.45 per cent.

"Beyond this, the stakes have got even higher in the easy access market with A&L improving its flagship savings offer. It is clearly still business as usual for A&L, despite its impending takeover by Santander. By repricing its eSaver to 6.6 per cent without using the hook of a bonus, A&L is clearly demonstrating its desire to stay ahead in the savings game.

"The Irish Government is also playing its part in boosting savings in Anglo Irish Bank. The compensation scheme there now covers the first €100,000 in deposits (about £79,000), and with Anglo Irish paying 6.4 per cent on its easy access account, it is definitely set to become a major player over here."