If your plans for the New Year include sorting out your savings, bite the bullet and make a start, now. Check out these best buy saving and regular saving accounts and make your money work harder.
The Northern Rock fiasco certainly got a lot of us thinking. For the first time, you probably questioned how safe your money actually is in a UK savings account.
Many people had no idea that their savings were covered by the Financial Services Compensation Scheme (which now covers 100% of our cash in a savings account but only up to £35k). We've realised that should we have more in a savings account than this, it would be wise to split it up into multiple accounts with a £35k maximum in each. What's more, we've discovered that even doing this is not as simple as it sounds as we first need to ensure each account has its own banking licence to make it eligible for a potential claim in the first place. Complicated, eh?
Well, at least it's made many more of us sit up and pay attention to what our savings are doing. And so we should - after all, we work hard for our money, so it makes sense to ensure it is protected and earning a great rate of interest.
And despite the fact the Bank of England recently chose to cut interest rates to 5.5% (great news for borrowers, but not so good for savers) there are still some great savings rates available. So if you've filled your cash ISA allowance for the year (or have no intention of using it) here are some of the current best buy savings accounts in which to stash that cash:
Top, High interest savings accounts
Provider | Account | Interest Rate/AER | Access | Min. deposit | Conditions |
|---|---|---|---|---|---|
Newcastle BS | Newcastle Net Savings (Issue 7) | 6.43% | No notice | £250 | Internet only |
HiSave | 6.41% | No notice | £1 | From 1st of January 2008, our Annualized Equivalent Rate (AER) rate is guaranteed to be 0.30% above Bank of England base rate till 31st of December 2011. | |
Icesave | Easy Access | 6.30% | No notice | £250 | Rate is guaranteed to exceed the Bank of England Base Rate* by at least 0.25% until 1 October 2009 and thereafter not to be lower than the Bank of England Base Rate until 1 October 2011. |
AA | AA Internet Access | 6.30% | No notice | £500 | No joint accounts. Internet access only. |
Yorkshire BS | Internet Saver | 6.20% | No notice | £1 | Internet access only. |
It's also worth noting that Birmingham Midshires is currently offering 6.41% with its Internet Saver account. This includes a 0.21% bonus for six months but comes with the stipulation that you won't earn any interest in any month you make a withdrawal, so not ideal if you like to be able to access your money regularly.
These accounts are clearly good for anyone already with a lump of savings. But what about those of us that are just starting to save? In this situation, an alternative (and potentially more lucrative) home for your money could be a regular saving account.
Regular Savings accounts
Instead of having free access to your cash, regular savings accounts ask that you do exactly that, and regularly save a set sum each month (typically £25+, although some will accept £10+). Rates of interest are usually higher (sometimes significantly so) than instant access savings accounts, but in order to earn that rate you'll have to make sure you don't miss a payment for at least a year. And while this may seem a little restrictive, it can be a great tool for encouraging those that have failed to save in the past to create a nest egg.
Conditions
Now it's worth noting that the "headline grabbing" regular savings accounts tend to only be available to savers that already have another product with the provider. For example, Alliance & Leicester currently offers a whopping 12%AER on its Premier Regular Saver, but to open one you'll need to already have one of its Premier current accounts. However, as these current accounts are market leaders in their own way, it can be worth investigating, if you're considering moving current account anyway.
But for those that are keen to save regularly and earn a good rate without being required to take out additional products, Leek United BS is currently paying 7.5%AER on its Regular Savings account, which requires monthly deposits of £10-£250.
Britannia BS is also paying 7.5%AER on its 1 Year Fixed Rate Regular Saver, with monthly deposits of £25-£250 required. And Abbey also offers a Fixed Rate Monthly Saver (Iss. 7) currently paying 7.25%AER on deposits of £20-£250 per month.
So if you've already used up your 2007/8 Cash ISA allowance (or you have decided to take out a maxi equity ISA) take a look at your savings needs. If your money is floundering in a poor paying account, now may be the time to move it. And for those people, whose New Year's resolutions were to get into the savings bit, why not check out regular savings accounts? You may just find they're perfect for your needs.
More: The Top Place to Stash Your Cash
> Visit our savings centre to compare savings accounts.