moneysupermarket.com: Flurry of savings product activity

Commenting on the recent flurry of savings product activity, Kevin Mountford, head of savings at price comparison website moneysupermarket.com, said: “Highly competitive and innovative regular saving products have flooded the market this week – but should Brits be tempted?

“The Alliance & Leicester savings account – linked to its mortgage product – has a mouth-watering rate of 15 per cent AER on its Mortgage Regular Saver. But prospective borrowers need to see past the marketing spin and ensure the total package offers value for money. The increased interest rate on the savings account will do little to offset the wrong choice on a mortgage product where the sums involved are often in excess of £100,000.

“Abbey's new Super Monthly Saver account offers regular savers a market leading 10 per cent AER. However, savers must hold one of the qualifying current accounts (amongst other products) in order to benefit. Savers must look beyond the headline rates and carefully asses the linked products to see if the overall deal is right for them.

“Savers not wanting to hold one of the other Abbey products will be able to take out an Abbey Fixed Rate Monthly Saver at a still quite exciting 7.25 per cent.

“I believe this is the start of a price war with a difference. Providers are looking to loss lead with savings accounts in order to tempt customers to other deals. This could be a great result for those savvy enough to look beyond the headline rates and only take out linked products where all the components are suitable.”