Savings for new starters

Act now if you want a decent savings rate - as they are disappearing!

The cut in interest rates is bad news for savers.

Already, Birmingham Midshires, the AA and Saga have withdrawn their top fixed-rate bonds from the market.

Others may soon follow suit.

So if you want a good rate, you'd better act fast.

£1 plus

If you only have £1 to open your account with, there's plenty of choice. Alliance & Leicester's eSaver Issue 2 pays 6.6% but the main drawback is that if you make a withdrawal you'll lose interest for the month in which the withdrawals were made - except for July when withdrawals are free.

HBOS-owned Birmingham Midshires eSaver issue 2 pays slightly less at 6.52% but there are no restrictions on the number of withdrawals you can make.

Bradford & Bingley has an eSaver account paying 6.51% but as the bank's savings business has been sold to Santander, it remains to be seen whether this rate will be cut at some point.

You might also want to consider ING Direct's instant access saving account, which pays 6.5% (although this does include a 1.66% bonus for 12 months).

£1,000 plus

If you've got a bit more to get started with there are several accounts worth a look although Alliance & Leicester's eSaver is still top dog. Coventry Building Society's SixtyPlus PostSave pays 6.6% on deposits between £500 and £250,000. However, as the name suggests you need to be aged 60 or older to open an account.

West Bromwich Building Society's Stratus No Notice account currently pays 6.56% and guarantees to pay at least the base rate until October 2009. You need at least £1,000 to open the account and are only allowed six withdrawals per year. The account must also be operated by post or in a branch.

Fixed rates

Fixed rates are dropping like flies. The AA One Year Internet Fixed Rate Bond, for example, is dropping from 7.21% to 6.3% this Thursday (so if you're reading this on Wednesday, you need to act fast!).

Similarly, Birmingham Midshires has cut its one year bond from 7.05% to 6.6% and its six-month bond from 7% to 6.85%.

Saga has also cut its one-year bond by 0.1%, to 6.55%, or you can get a six-month bond for 6.8%.

Regular Savers

If you can afford to commit to saving a set amount each month, then regular savers are a good option. However the best rates tend to come with some onerous terms and conditions.

Abbey's Super Fixed Rate Monthly Saver, for example, pays 10% AER and you have to pay in a set amount between £20 and £250 each month. However to open this account you must start a new regular investment, Pension or Protection Plan with Abbey too - and these linked products might not necessarily be the best for your needs or situation.

If you want a regular saver which doesn't involve taking out another product with the same bank, Barclays Monthly Savings Account pays 7.75% and you can pay in anything from £20 to £250 per month, or nothing at all as you don't have to commit to a set amount. However the interest rate drops to 2.99% for any month in which a withdrawal is made.

Abbey's Fixed Rate Monthly Saver pays 7.25% and you have to commit to paying in a set amount of between £20 and £250 each month to continue to get the rate. Withdrawals are permitted at any time but you'll receive a lower interest rate of 0.10% on the whole savings balance for the month in which a withdrawal is made.

> Compare savings accounts at Fool.co.uk