High Rates With Handcuffs!

There are some terrific savings accounts out there, but many come with strings attached. We show you how to grab these great deals.

Never look a gift horse in the mouth -- unless it's been offered to you by a bank or building society, that is!

What I mean is that if something sounds too good to be true, then you should instantly be suspicious of what's on offer. For example, let's say that you want to find a savings account with a headline-grabbing, market-beating, table-topping rate of interest. If this is the case, then you need to look beyond the big numbers by studying the small print, because the Devil's in the detail!

For instance, according to independent financial researcher Moneyfacts (which powers the Fool's search engines for bank accounts, credit cards, mortgages, personal loans and savings accounts), these are the only savings accounts which pay pre-tax annual interest of 8% or more:

Best Buy regular-savings accounts

*Company/ Account name*	Min/max monthly deposits	Interest rate % AER)	*Notes*
Alliance & Leicester Premier Regular Saver	£10 to £250	10%	Only available to new Premier/ Direct Current Account customers
Barclays Regular Saver	£25 to £250	10%	For new and existing customers who pay monthly salary or pension of £1,000+ into Barclays current a/c
Ipswich BS Target Saver	£90 to £250	8.05%	Branch-based account
Lloyds TSB Monthly Saver	£25 to £250 (for two years)	8%	Extra £500 initial deposit allowed; new and existing current a/c customers
HSBC Regular Saver 2	£25 to £1,000	8%*	For new and existing customers who pay salary or pension into HSBC current a/c
Norwich & Peterborough BS Gold Savings	£20 to £250	8%	New and existing customers who pay monthly salary or pension of £1,000+ into N&P Gold current a/c

* Contributions of up to £250pm earn 8%; payments over this level earn 4.25% AER.

Please note that these are all regular-savings accounts, which require you to pay a fixed monthly amount for a year or more in order to access these top-notch rates (it pays to think of them as one- or two-year savings bonds). Furthermore, these accounts transfer your nest egg into decidedly inferior accounts on maturity, so make sure that you close your account and withdraw your money as soon as it matures.

So, as you can see, to get a mouth-watering rate of 10% a year, you need to open a new A&L current account, or pay a grand a month into a new or existing Barclays current account. The only one of these six regular-savings accounts not to tie you into a linked current account is the Target Saver, which is operated by branch, and all Ipswich BS branches are in Suffolk.

Then again, I think that the Alliance & Leicester Premier Regular Saver is a great offer, because it tops the above table, but also because the current account to which it is linked is itself a Best Buy, award-winning bank account, as I explained here.

In summary, the moral of this story is simple. These accounts exist for one reason only: as loss-leaders to encourage you to move your current account to the bank in question. If you want to beat the system, you could, for example open a Lloyds TSB bank account with just £1 purely in order to gain access to a super savings rate of 8% a year. The choice is yours!

More: Use the Fool to compare savings accounts, compare bank accounts and compare credit cards!

Disclosure: Cliff owns shares in Lloyds TSB.