Sainsbury's has launched a new market-leading personal loan. That's not a surprise as the supermarket banks often offer excellent financial products.
Sainsbury’s was the first major supermarket to launch a bank in 1997, and it didn’t take long for Asda and Tesco to follow suit. These days the supermarkets offer some excellent financial products, so we thought it was worth rounding up the best deals you can get from the supermarket banks.
Loans
If you’re looking for a personal loan, check out Sainsbury’s first. With the Sainsbury’s Finance Shopper Loan, some folk can borrow between £7,500 and £15,000 and pay just 6.2% a year in interest. No other lender is offering a cheaper loan.
In fairness, not all applicants will get a loan at this rate, but it’s still a cracking offer that is well worth considering.
Top personal loans for £7,500 to £15,000
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Lender |
Interest rate |
Comments |
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6.2% |
This rate is only available to Nectar cardholders |
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6.2% |
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6.3% |
Loan is only available on comparison sites such as Mirror Money |
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6.3% |
Loan is only available on comparison sites such as Mirror Money |
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6.4% |
Only for existing HSBC current account customers |
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6.4% |
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Credit cards
Let’s move onto credit cards, and in particular, cards offering 0% for purchases. These are cards that enable you to borrow money to buy something without paying any interest for a year or more.
Right now, Tesco is leading the way in this market with the Tesco Clubcard Mastercard. If you make a purchase with this card, you won’t have to pay any interest for up to 15 months! You’ll also get a Tesco Clubcard point for every £4 you spend on the card.
The only other card with such a long 0% period for purchases is the M&S Credit Card.
Just make sure you make the minimum payment every month, and remember that the 0% period begins when you take out the card, not when you make the purchase.
Sainsbury’s strongest card is the Sainsbury’s Low Rate Credit Card which is also a market-leading card. If you transfer a credit card debt to this card, you’ll pay 6.9% on your debt and you won’t have to pay a balance transfer fee.
And if you make a purchase that you don’t pay off in full when you get your next bill, you’ll also be charged the same 6.9% rate.
Apart from the 0% cards, no other card offers such a low interest rate, so this Sainsbury’s card should be very attractive for anyone who wants to have a nice simple card that they can use for just about everything.
Savings
When it comes to savings, the supermarkets aren’t so strong overall, but Tesco and Sainsbury’s do offer some decent fixed-term bonds.
You could earn 3.4% if you locked up your money for a year with the Sainsbury’s Fixed Rate Saver, and you could get the same rate from Tesco’s one-year bond. However, that’s a little less than the market-leading one-year bond. Cheshire Building Society’s one-year fixed rate bond pays 3.55%.
If you want a two-year bond, Sainsbury’s offers a 3.76% rate whereas Tesco only pays 3.6%. The market leader is the Post Office Growth Bond Issue 15 which pays 3.96% a year.
Over three years, Sainsbury’s once again beats Tesco with a bond that pays 3.9% compared to 3.65% from Tesco, but the Post Office is once again the market leader. Its three-year bond pays 4.21% a year.
Current accounts
Neither Tesco nor Sainsbury’s offer current accounts but that will change next year when Tesco makes its long-awaited entry into the current account market. This move has been delayed by technical problems, but once those problems are sorted out, we expect Tesco to make a splash by launching a highly competitive account.
For now though, the only supermarket that offers a current account is the Co-op. The Co-op Current Account Plus offers a fee-free £200 overdraft facility as well as preferential mortgage deals. However, users have to pay in a minimum of £800 a month into the account.
A lot of people have switched their current account to Co-op in recent weeks thanks to a very attractive switching offer. Basically, if you go to a Co-op bank branch and switch your current account, you’ll get a £200 reward. Find out more here.
You might also be surprised by how many branches the Co-op Bank has. Thanks to a merger with Britannia Building Society, Co-op Bank now has 313 branches. It’s even experimenting with branches inside Co-op supermarkets. If the trial goes well, Co-op Bank could end up with branches all over the place.
Insurance
You may be wondering why we haven’t mentioned Asda so far. It’s because Asda only offers savings products for children and its credit card isn’t that great.
Asda has a weightier presence when it comes to insurance, but it’s hard to compare Asda’s policies to rival insurers as the deal you get will depend on your circumstances. What’s more, it’s a mistake to choose an insurance policy purely on price. There’s no point in getting a cheap insurance policy if it doesn’t pay out when you need it.
The best thing to do is shop around and find an insurance policy that works for you.
So that’s the lowdown on the best financial products from the supermarkets. Let’s just hope that Tesco moves quickly and launches a current account as soon as possible.
More: Switch current accounts without fear | The best credit cards for Xmas