Alliance & Leicester increases interest rate on eSaver

Alliance & Leicester is increasing the interest rate on its popular eSaver account to 6.56% AER for savers who open a new account from 3 September.

The account includes a bonus of 0.94% AER, payable until 7 December 2009.

The new deal is an increase from 6.50% AER, which eSaver has paid since it was first launched in November 2007, despite three cuts in the Bank of England base rate since then. All existing eSaver customers will continue to benefit from the 6.50% rate.
eSaver is designed for long term savings rather than for regular dipping in, and pays the same level of interest on all balances from £1 up to £500,000. It is one of a new breed of savings accounts which offers a high rate of interest but, instead of locking away your money like a notice account, offers instant access if you need to access your money. However, to encourage people to become long term savers, interest is not earned for months in which withdrawals are made, except during the month of July when withdrawals can be made with no loss of interest.

eSaver is also ideal for customers who need a regular income from their savings, such as the retired, because interest is earned monthly and can be paid away to the linked current account without it being treated as a withdrawal.

Hetal Parmar, Manager for Savings at Alliance & Leicester, said: "With the cost of living increasing day by day, it's important to make our savings work as hard as possible - eight out of ten of us look for a good rate of interest when choosing a savings account. We are pleased to increase the interest rate on our popular eSaver account to 6.56%.

Hetal Parmar continues: "eSaver is designed like an old fashioned piggy bank - you can put money in whenever you like - but it is not for those who want to regularly dip into their savings. Having said that, interest is paid monthly, which is used by many existing eSaver customers to top up their monthly income and is ideal for "silver surfers" looking to top up their pension each month, without risking their capital.

"The account pays a high rate of interest on the basis that money is put away for the longer term but also provides you with the comfort of knowing you can access your money if you really need it."

For further information on Alliance & Leicester's savings accounts visit alliance-leicester.co.uk