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Savings with six appeal

It’s been a while since you could earn six per cent on your savings. But now Sainsbury's has shot to the top of the best buys to offer that top rate on instant access cash savings with no catches. At the moment the other members of the six per cent club should be avoided. But rates are heading up so move your money if a better deal appears, writes Paul Lewis

Go for it – top two
• Sainsbury’s Bank gives a clean 6% on every £1 on its Internet Saver account, no tricks or traps, and you can put in up to £2 million. Paid yearly. Newcomer to the best buys so keep your eye on it.

• Icesave from Icelandic bank Landsbanki pays 5.95% with no strings as long as you have £250 or more (up to £1 million). Paid yearly or monthly. A good track record so far.

Four to avoid
• ICICI Hi Save account offers a market leading 6.05%. There are no catches but for some unexplained reason this Indian bank is still not a member of the Banking Code Standards Board nearly two years after its launch. Wait until it is.

• Coventry Building Society Sixty-Plus eSave promises 6.03% on every pound. It pays a fixed 6.2% until 31 March 2008 and then it drops to the bank base rate – currently 5.5%. Too complicated.

• HSBC Online Saver offers 6% on your money from the first £1. But the deal-breaker is that if you withdraw any of your money you earn no interest for that whole month. That slashes the rate each time you take your money out. You could earn nothing. Misleading.

• Chelsea Building Society Rainy Day PostSaver offers 6% as long as you have £500 to save. But that rate only lasts for a year. After that it will fall to 5% which barely gets it into the top 50. Don’t take the bait.

Bottoming out
• ING Direct – its ‘one simple rate’ is now a ‘once good rate’. ING pays just 5% after it ignored two rises in the bank base rate.

• Halifax Liquid Gold – once a market leader but now in the bottom 20 at only 1.11% on every pound you save up to £2 million. How the mighty have fallen!

• The very lowest rate is from First Direct which pays a negligible 0.1% on the first £249 in its Everyday Savings account. Why do they do it?

Source: moneysupermarket.com - interest rates shown are AER before tax.

* The views expressed in this column are those of Paul Lewis and are for general information only. Always seek independent financial advice.

This article was created: 20 June 2007.
This article was last edited: 20 June 2007.

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Savings with six appeal