The supermarket savings war 1- 0 to Sainsbury’s

Rachel Thrussell, Head of Savings at Moneyfacts.co.uk, comments: “Last week saw the savings market taken by storm with the rate increase on the market leading no strings savings account from Sainsbury’s Bank now paying 6% gross/AER. This was shortly followed by Tesco’s upping its game. The existing Tesco Savings account now offers a six-month introductory bonus of 1%.

“Tesco’s headline rate is now a heady 6.50%, but must be taken with a pinch of salt. Unlike the Sainsbury’s account, it includes the 1% six-month bonus (for accounts opened until 14 August). On top of this the rate only reaches 6.50% gross on deposits over £50K and can dip as low as 5.35% gross on deposits of £1 - £2,999.

“It’s great news to see the supermarkets competing with the traditional banks and building societies. But as with all accounts you must look beyond the headline rate. If it looks too good to be true then there is probably a catch. One nil to Sainsbury’s.”