You could be paid 7.5% interest on one table-topping savings account, although the conditions are very tough! We give you the lowdown on the best savings deals.
I was perusing savings account tables earlier this week (as you do) and I was surprised to find an account that paid out 7.5% interest. Even after last month's rise in the base rate to 5.5%, that's some payout! What's more, the minimum deposit is just £1.
But then I read the blurb, and there's a very big catch. Yes, the BMW Car Saver Account pays out a stonking 7.5% AER, but you can only open the account if you saving to buy a BMW car in the next year. That counts me out....
Still, there are plenty of other good savings accounts out there with far less onerous conditions.
The Anglo Irish Bank 1-year Fixed Rate Bond, for example, pays out a 6.45% AER. You have to keep the money in the account for a year, and the rate won't go up even if the base rate rises futher, but it looks a pretty attractive deal to me.
However, I suspect many Fools prefer the simplicity of an instant access savings account. So I've picked a selection of five instant access accounts which would accept a one-off deposit of £500 and are available to all -- not just pensioners. I've also tried to focus on savings accounts that don't have too many strings attached.
My favourite instant access savings accounts accepting £500 deposits:
| Provider/ Account | Interest AER | Min/Max Deposit | Bonuses/ Conditions/ Guarantees |
|---|---|---|---|
| ICICI HiSAVE (apply through The Fool) | 6.05% | £1+ | Gross rate stays at least 0.25% higher than base rate until 31/12/07. |
| Chelsea BS Rainy Day Post Saver | 6% | £500-£250k | Rate includes introductory 1% bonus for 12 months. Withdrawals beyond £2000 in a year will be charged at £25 per withdrawal. Post only. |
| Icesave Easy Access (apply through The Fool) | 5.95% | £250- £1million | Guaranteed to exceed base rate by at least 0.25% until October 2009, then not be lower than base rate until October 2011. |
| Anglo Irish Bank Easy Access Deposit | 5.85% | ££500- £1million | Rate guaranteed to be at least equal to base rate until January 1, 2008. Post/phone only. |
| Principality BS e-SAVER | 5.85% | £1-£1million |
Of the above five, my absolute favourite is the Icesave account. I like the base rate guarantee which lasts until October 2011. That means you can stick some money in this account and forget about it for a few years, confident that you're getting a decent return whilst you concentrate on other things.
So there you have it, a brief review of some of the best savings accounts available today. And if you're not a regular saver right now, I urge you to start saving if you possibly can. Saving money now could be the route to financial security in the future.
More: The Saver's Greatest Enemy | Superior Savings Accounts!