Savers spoilt for choice following interest rate rise

Savers are enjoying the highest savings rates for years, following the latest rise in base rate to 5.75 per cent, with plenty of accounts paying 6 per cent or more, according to leading personal finance website Find.co.uk.

‘No notice’ accounts

One of the best ‘no notice’ accounts is Manchester building society’s Premier Postal account which is paying 6.01 per cent gross/AER, on a minimum balance of £1,000, while you can obtain 5.90 per cent gross/AER on Anglo Irish Bank’s 7 Day notice account on deposits of just £1.

Online accounts

Online accounts such as a Sainsbury’s Internet Saver will pay 6.25 per cent gross/ AER on a deposit of just £1 from 1 August 2007, while Icesave’s Easy Access account will pay 6.20 per cent gross/AER, on a minimum deposit of £250 from 13 July.

Icesave is also highly competitive for monthly interest, with its Easy Access account giving 6.03 per cent gross, on a minimum deposit of £250.

One year tie-in

If you are able to tie your money up for at least one year, Coventry building society’s 1 year Fixed Rate Bond is paying 6.55 per cent gross/AER until 1 August 2008, while Bank of Cyprus’ UK Bond 10 – a one year bond - is paying a shade less at 6.53 per cent gross/AER.

Special Conditions

But some of the best rates are paid on accounts which carry special conditions, such as requiring a minimum monthly deposit or that the account holder is above or below a certain age.

Alliance & Leicester’s Premier 21 account incorporates both these conditions and pays a whacking 10 per cent gross/AER (fixed until 31 July 2008), but only on balances of up to £1,000. The other catches are that the account is limited to those aged between 16 and 21 and requires a minimum deposit of £250 a month, and the interest rate on balances over £1,000 is a paltry 0.10 per cent.

At the other end of the age spectrum, Coventry building society’s Sixty-Plus eSave rate pays 6.40 per cent gross/AER annually, on a minimum balance of £1, but this rate includes a 0.90 per cent bonus until 30 June 2008.

For the over 50s, Northern Rock’s Silver Savings account is giving 6.25 per cent gross/AER variable interest, which is guaranteed to be no lower than the Bank of England’s base rate until 31 January 2010.

Regular Savings Accounts

Regular savings accounts also pay high rates of interest, but if you fail to keep up with the regular monthly payments, the rate typically plummets to a highly uncompetitive rate.

Yorkshire building society’s regular saving account pays 7 per cent AER/gross on minimum deposits of just £10 a month, while Abbey’s Fixed Monthly Saver 6 pays 7.23 per cent AER/gross, providing you deposit at least £20 a month.

Higher rates may be obtained on certain accounts which include an introductory bonus rate for a limited period, but the onus is on you to remember to move your money at the end of the bonus period.

Kate Marsden, marketing director at Find.co.uk says: “The savings market is highly fragmented with accounts targeted at specific groups, levels of saving and deposit terms. But there are competitive rates for everyone, providing you are willing to shop around and check out the best buy tables such as those on Find.co.uk”