A new market-leading savings account has arrived but is it any good?
Some good news for savers, as Britannia has launched a best buy account with a rate of 1.75%.
The Select Saver 3 storms to the top of the easy access charts and can be opened with £500 online, by phone or in branch.
But the major flaw with this new account from Britannia, which is owned by the Co-operative Bank, is that customers can’t access it online.
Market-leading account
Interest rates in the savings market have been slowly decreasing over the past year largely because of the Government’s Funding for Lending Scheme. This has given banks and building societies access to cheap money, so there is less need for them to collect savers’ deposits.
But the new account is a positive sign and offers another option to savers wanting to gain some interest on their cash.
The account from Britannia is market-leading and there is no bonus rate attached, so you don’t have to worry about the rate falling after a certain amount of time.
But it's not as flexible as some other easy access accounts on the market. Each year you’ll only be allowed to make up to four withdrawals without losing some of the interest you are earning. If you do take out more than this, the rate will plummet from 1.75% to 0.10%.
[SPOTLIGHT]Another flaw with the account is that you can’t operate it online. Although you can deposit money online, the account can only be managed in a branch, by post or telephone so it won’t be suitable for everyone.
How does it compare?
The Select Saver 3 hass the best rate available on an easy access account. The next best rate comes from the Yorkshire Building Society at 1.65% for its Triple Access Saver. This allows three penalty-free withdrawals per year, although the rate is dropping to 1.40% on 16th September.
BM Savings comes next with its Savings Online Reward Issue 3 account. But while this pays 1.65% as well, you’ll need £25,000 to open the account and it includes a bonus of 1.15% for the first year.
Following on are two accounts on the same rate of 1.60%. The first is the Online Saver Issue 5 from The Coventry Building Society which can be opened with £1. The second is the Branch Easy Access Saver Issue 3 from from The West Brom, but you’ll need £1,000 to open it and both of these can only be accessed online.
Here I’ve listed the top five across all instant access accounts.
|
Account |
Interest rate (gross AER) |
Minimum deposit |
Withdrawal limits |
|
Britannia Select Access Saver 3 |
1.75% |
£500 |
Four penalty-free withdrawals |
|
Yorkshire BS Triple Access Saver (Issue 3) |
1.65% |
£100 |
Three penalty-free withdrawals a year |
|
BM Savings Online Reward (Issue 3) * |
1.65% |
£25,000 |
None |
|
Coventry BS Online Saver (Issue 5) |
1.60% |
£1 |
Four penalty-free withdrawals a year |
|
West Brom BS Branch Easy Access Saver 3 |
1.60% |
£1,000 |
Two penalty-free withdrawals a year |
*Includes a bonus of 1.15% for the first year.
Choosing the right account
If you’re looking for an instant-access savings account the new Britannia offer is attractive. It pays the highest rate around and you can open it with a relatively small deposit.
However, the fact it’s not available online will deter many savers. This seems rather backward in today’s savings market and detracts from the fact this is a good account offering a competitive rate.
The current account market is also worth a look in if you’re after some interest and ready access to your money. Santander offers up to 3% in-credit interest on its 123 current account and Nationwide pays 5% on balances up to 2,000. You can find out more in our article Why some current accounts are better than savings accounts