Earn 6% on your savings!

Fed up with earning a pathetic rate of interest on your savings? We show you where you can still enjoy rates of up to 6%!

These days it seems we very rarely get rewarded for being a loyal member of our bank – particularly when it comes to savings accounts. Indeed, many of the top paying savings accounts seem to be for new customers only - which hardly seems fair to us loyal customers.

However, if you’re prepared to look hard enough, you will find that in fact, there are some savings accounts which are only offered to those people who already have a current account with that particular bank. And the good news is, many of these current accounts are offering market-leading deals to new customers. So, if you’re prepared to take out a new current account, you'll get doubly rewarded for doing so, with both a better current account and access to better savings accounts.

• Watch our video: Five top tips for choosing a current account

So let's take a look at some examples.

Alliance & Leicester comes up trumps

If you haven’t quite got into the savings habit yet, a really great way to do so is to set up a direct debit and pay a fixed amount into your savings account each month.

One of the easiest ways to do this is to open a regular saver account. The top offering* on the market right now is the Alliance and Leicester Premier Regular Saver Account, which offers a fabulous interest rate of 6% for 13 months. That['s more than double the rate you'd get on an easy access savings account.

All you need to do is pay in between £10 and £250 a month and ensure you do not make any withdrawals during that time.

However, to qualify for this account, you will also need to open the Alliance & Leicester Premier Direct Current Account or the Alliance & Leicester Premier 50 Current Account, and switch all your direct debits and standing orders over.

Unfortunately, you'll only qualify for the Alliance & Leicester Premier Direct Current Account if you can afford to pay in £500 a month, while to apply for the Alliance & Leicester Premier 50 Current Account you will need to be aged 50 or over and pay a fee of £10 a month. However, with the Premier 50 account, you will also be rewarded with annual worldwide travel insurance up to age 79, exclusive health benefits, and identity protection – benefits which Alliance & Leicester claim are worth more than £300.

Although switching might sound like a bit o a hassle, Alliance & Leicester will do all the hard work for you with their switching service. What's more, both of the Alliance & Leicester Premier Direct Current Account and the Alliance & Leicester Premier 50 Current Account are extremely competitive because they both offer an interest rate of 5% on balances up to £2,500!

So that means that as well as earning 6% on your savings, you could be earning 5% just on your current account.

Plus, if you’re prone to slipping into the red, both the Alliance & Leicester Premier Direct Current Account and the Premier 50 Current Account offer an interest-free overdraft for 12 months on overdrafts up to £2,000. After that time, you will be charged a usage fee of 50p a day (up to £5 a month).

Bear in mind that It’s also worth noting that unfortunately, the Premier Current Account (separate from the Premier Direct Account), which is currently offering £100 in cash to new customers who sign up, is not part of the Premier Regular Saver deal.

Handsome offerings from Halifax

A few months back I decided to switch over to the Halifax Reward Current Account because I think it offers a pretty competitive deal. After all, every month you pay in £1,000, you will receive £5 (whether you’re in credit or overdrawn).

• Watch our video: The cleverest current account around

But the benefits of this account don't end there. Because if I decide to also apply for the Halifax Web Saver Extra Account, I will get a market-leading interest rate of 3% just for being a Halifax current account customer. This compares to the 2.80% offered to savers who do not hold a current account with Halifax.

The only drawback to the Halifax Web Saver Extra Account is that you can only make one penalty-free withdrawal per year. If you make any further withdrawals, you will lose the equivalent of 30 days’ interest. On the plus side, you only need £1 to open the account.

Fabulous deals from First Direct

Another option you could consider is First Direct. Not only does First Direct offer a great current account, but it also offers some pretty competitive savings accounts. And on top of that, it’s renowned for its excellent customer service.  

If great customer service isn’t enough of an incentive, however, you might be more tempted by the £100 in cash you'll receive if you decide to apply for the First Direct 1st Account. What’s more, if you decide you’re not happy within the first year, you’ll be given another £100 to leave! Bear in mind you will need to pay at least £1,500 into the account each month to qualify.

Once you’ve opened this account, you’ll also be able to apply for the First Direct Regular Saver Account which offers a competitive interest rate of 5%. Although this isn’t quite as good as the 6% offered by the Alliance and Leicester Premier Regular Saver Account, it’s still an attractive rate and First Direct is recommended by lovemoney.com readers for its customer service.

The rate applies for the first 12 months and you can pay in between £25 and £300 a month – so slightly more than for the Alliance and Leicester account. Once again, you won’t be able to access your money during that time.

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In fact, the top paying ISA which allows transfers in is the Nationwide e-ISA which only offers a slightly higher interest rate of 2.75%. However, this is a variable rate (although it includes a fixed bonus of 1% until 30 June 2011), so it could change at any time. In comparison, the First Direct cash e-ISA offers a fixed rate until 31 October 2011 - so you can be reassured the rate won’t change until then (when it drops to 0.20%).

You will also be able to easily access your funds from the First Direct e-ISA and although you don’t have to have the First Direct 1st Account, if you do, you will be able to access those funds immediately.

So as you can see, there are some banks who do have it in their hearts to reward their loyal customers just a little! The trick is simply to make sure you use your current account to your advantage in order to get a better deal on your savings.

*This excludes the HSBC Preferential Regular Saver at 8% which you have to pay for.

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