I understand that Birmingham Midshires are paying 5.1% on savings on their e-saver account.

Are there any better deals out there?

Yes, there are marginally better instant-access Internet savings rates but not by all that much now. For a short period until 1st October, Birmingham Midshires were offering 5.4% on basically the same account as the one I think you're describing. What they seem to have done as of 1st October is re-issue their e-savings product (note the 'issue 2' in their description) with a reduced first-year introductory bonus as far as I can make out. Very probably you can still get better rates in a 1-year bond. Then there's always vintage wine or Outer Mongolian property etc.

Alliance & L are paying 5.35% on a savings account.
Skipton are paying 5% on savings over 50k - base rate tracker.
Abbey are paying 5.35% on cash Isa's.

We are cashing in our premium bonds - return not good enough..!

Premium Bonds are not an investment - you are better off without them and using the interest on your savings to buy a lottery ticket.

If I believe my own advice, then fixed rate savings will be the best bet, as I believe that interest rates will fall next year.

I've been saying that for several months myself, and mentioned it previously in this thread. I am quite pleased about the 5.61% 1-year bond I took out in June, noting that the building society appears to have reduced the interest rate on new issues to 5.25% recently. (Well, at least I'll be pleased if they stay solvent until next June).

But there seems to be a new player heading the Moneyfacts Best Buys for fixed interest investment as of today: the London Scottish Bank. Anyone know anything about them (owned by, reputation etc)?

when looking at savings accounts, do you check whether they're daily or annual interest compounding ?- I didn't (dufus) , but I got the BMS 5.4% mentioned above just under the wire before it went to issue 2. By my reckoning, there's a 0.13% effective interest rate difference between daily and annual interest. Is the A&L daily?

Try this link London Scottish

I understand that they are providers of home collected credit amongst other services. I personally would be more concerned about this bank than the mainstream high street banks and would consider the FSCS compensation limits when deciding the amount to invest. (Limits are 100% of the first £2k invested followed by 90% of the next £33,000) The maximum compensation payout is £31,700 with nothing payable on balances over £35k

Thanks for the link, M21er. This puts their sudden appearance in the Best Buys table a bit more in context - although the 5.65% is actually a reduction from their previous rate (which I didn't realise and which they didn't offer for very long anyway) the other major players seem to have reduced theirs more substantially.

Halifax have a drip-feed account (£250 per month) paying 7%.

BB

Halifax Regular Saver details

The headline rate is fantastic but once you read the conditions the actual cash benefits of opening the account are relatively small - the main drawback being that you have to transfer the accumulated sum after twelve months into another (lower paying) Halifax savings account. In reality, you would probably transfer back to IngDirect or another more competitive provider.

If you deposit £250 per month, you will save £3,000 over the year which means that your average balance is only £1,500 - the 7% is an extra 2% over and above IngDirect's account. The benefit is £24 pa for a basic rate taxpayer (£1,500 x 0.02 x 80% = £24)

It's a pity it doesn't have a longer period say 5 years which would have meant the extra interest would really start to mount up but I guess the cost to the Halifax would also mount up!

Best Savings Accounts (The Motley Fool)

Thanks Wise Buddah! You are indeed the wise one.

I fear however, that advertising revenues may take preference over providing the real facts.

Bullish Bear, if you want the real facts try


http://www.moneyfacts.co.uk



It is a completely (almost) independent website and you can put in your requirements to find the best deal for you. Happy hunting!

Abbey do a drip feed similar to the Halifax at 7%, between them you can put away £9000 in a year so over the year you'll get 7% on £4500 + whatever interest from the account you drip feed from.

No idea about longer term - maybe buy a house?

I've scoured the net and money mags for best buys, having just STR'd...the odd point percentage can really make a difference to the sizeable deposit you might have! I've been careful to spead the load across banks. These banks, to my knowledge, are independent of each other so I'm insured for the 30K in each account.

So here's my 'portfolio':
Northern rock @ 5.41% - 50K
Alliance & Leicester 5.35% (25K max.) - 25K
AA 5.31% - 30K
Bradford & Bingley 5.25% - 30K
First Direct 5.2% - 30K
Cahoot 5.1% - 30K
Premium Bonds 30K
Deutche Bank 'ratebuster' - 30K

Abbey National offer 5.4% for investments of 200K and over, but I couldn't sleep at night with all eggs in one basket! I also have a Cahoot bank account which is Abbey owned.

255K in cash - WOW!

Interesting that fixed rate savings have been creeping up again slightly, or at least some new players have appeared at the top of the Moneyfacts pile:

JULIAN HODGE BANK Capital Millennium Bond 1 Year Bond £1,000 5.40%

Never heard of them, has anyone else?



Any better ideas? Not BTL portfolios, I take it. Commercial property funds?

Obviously an STR has to be looking at something fairly tax-efficient particularly if they have other sources of income, so perhaps that has been the appeal of Premium Bonds despite the low returns.

Incredibly wealthy Welshman. Owns most of Cardiff City centre so has enormous rents coming in. He passed away recently.

Egg - 5.5% for 6 months!

Not any more. They withdrew that offer about 2 weeks ago.

Absolutely spot on. I pay tax at 40% and want easy access to my money, so aside from no-notice internet accounts, the Premium bonds returns are SO much better...tax free! (Provided my numbers come up, of course.)

Yes, unfortunately I just found out the same thing. It ended on 2nd March. They also offered some kind of guarantee whereby they would raise their rates within 14 days of BOE rates - something I hope a few other financial institutions catch on to - rate lag last year was fairly significant over the period and one reason I looked at fixed rate savings.

Premium bonds still have a £30K limit, don't they, but at least it's a start! Other than that, the tax position of being an STR is a fairly good incentive not to have a job, particularly a low-paid one!

A perfect opportunity to go travelling, if you don't want to pay rent!
Then you can come back to collect your premium bonds winnings...

Funny that, I've just come back from South Africa as it happens

Kirstie had a bit to say about Sell-To-Backpack-ers, didn't she?

Re. premium bonds, I'm changing my mind slightly after looking at the latest figures for the average return: 3.2% which when grossed-up for a 40% taxpayer is still only 5.33, marginally less than the best fixed-rate bonds I mentioned (5.4%). Then there is the snag where you have to wait until the second calendar month after you apply, to be eligible for the draw. National Savings Certificates are worse: grossed-up from 3% they are only equivalent to 5% - a typical Internet account rate.

I wasn't joking about commercial property funds. The one in my HBOS pension plan has gone up 15% over the year and is still rising. Another good thing is that is is less volatile than most of their other funds and hopefully (that is the theory) it will be easier to spot when and if it falls.

Easy access? How long do you need to stash the cash before the returns become worthwhile? I need to get to my cash in case I need it... I considered other investments, but for short term, low risk, easy access, it had to be the Internet bank/premium bond route.

I am not completely sure whether or not it would meet the criterion of easy access. A related product I had in mind is a PIP. It advertises: "You can take out money whenever you want". This includes partial and complete cash withdrawals. For one-offs, you get a cheque within 4 days.

But then in the online summary PDF document it also says "Some of our funds invest in property and there may be a delay of up to six months in selling the shares of these funds when you cash in all or part of the plan.".

I have queried this as I don't know exactly how this would affect an instant cash withdrawal from the plan. That, rather than the risk, is what made me hesitate to invest, but it will be interesting to see their reply.

I have also put in a query about their level of management charges as this is also unclear: "Your fund may also have to bear the cost if any of buying, managing, and selling investments, as well as certain other charges, including any fees levied by the financial services industry" - on top of a fixed rate charge! That could mean anything.

The fund is not subject to basic rate tax (only higher rate) but presumably you have to make a profit first.

i am thinking of moving some of my stash to the Abbey National E-saver which pays 5.40% gross p.a. The rate includes a 0.5% bonus which expires after 6 mnths.

is there anything to stop me from rolling my money into a brand new account again after 6 mnths?

I am not aware of anything to stop you withdrawing your cash at the end of the 6 months or earlier on this type of account (after all, they could easily reduce the underlying interest rate at any time) but for very large balances it is well worth making sure they can do same-day CHAPS transfers in and out, preferably without the hassle of a feeder account.
NB Abbey's 5.40% only applies to balances of over £200K.

One thing that concerns me about investing large sums
with unfamiliar banks/societies is that the upper limit for
compensation in the event of such an institution going
bust is about £32,000 and only to 90% of the deposited
sum.

It would seem wise to split up larger sums between
organisations.

The Derbyshire Building Society Offer a Regular Savings Account. It has it's limitations but seems pretty good as I've maxed my ISA and am nearly up to limit with Alliance & Leicester Online Saver. Much better than crappy Halifax and HSBC 7 and 8% acounts.

http://www.thederbyshire.co.uk/savings_and...tes.html#regsav

Interest Rate 5.85% gross/aer (4.68 net)

Key Features
Minimum opening investment : £10
Maximum opening investment : £1000
Minimum Amount in Account : £10
Minimum transaction at branch counter : £10
Withdrawal Notice : None
How about interest? : Paid annually on 31 July
Interest is credited to your Regular Savings Account

Qualifying for the bonus rate
You will receive interest at the bonus rate on 31 July each year if you:

Save between £10 and £1,000 each month
Miss no more than one monthly payment in the account year (between 1st August and 31 July)
Don't make more than one withdrawal in the account year
You will qualify for the bonus rate on closure if you:

Have missed no more than one monthly payment in the account year
Haven't made any previous withdrawals in the account year
If you don't qualify for the bonus rate, you will receive interest at the standard rate.

The Chelsea BS have a new account - www.save4arainyday.co.uk

5.25% gross
£500 min opening balance
Max balance £25K

there are some drawbacks, but at least it's a fairly newish account that isn't internet based which I am avoiding.

Why are you avoiding internet account? Is there something I should know about them?

Some of those on your list have "bonus" % which reduces quite a bit after the intial 6 months!

This is a COMPLETELY independent UK money saving site - pretty good I think!

http://www.moneysavingexpert.com/savings

QUOTE from site - "For more on how it works and the site’s non-profit driven ethical and financial policy read this" - http://www.moneysavingexpert.com/aboout.phtml

Just to add that for anyone in the Stroud and Swindon Building Society region you can get 5.5% but only at a branch or through an intermediary.

In case anyone isn't aware the FSA will only guarantee a maximum of 35K (100% of first 2K, 90% of next 33K) for an individual's deposit with any individual institution.

BTW, does anyone know if the FSA has ever actually paid out for a failed bank?

Just not trusting enough of them.

Whilst surfing I found a bank called "Icici bank". Anyone heard of them?

There saving rate looks like 5.4% AER which works out 5.27% gross. Sounds pretty good to me. Let hope it stays that way.

If it does, I might be tempted to move my ING savings...

Biggest bank in India, and working with lloyds TSB. Should be ok, but I'm guessing the call centre will suck.

Marin Lewis over at moneysavingexpert.com is currently doing the full check out and will report soon. Read their forums for more info. He's expecting to give it the thumbs up

Have noticed a few banks are reducing their interest rates on saving accounts.

A+L online saver @ 5.35% (now been reduced to 5.00%) is gone replaced with plusaver @ 4.50%. The AA has droped thier interent account rate by 0.2% for issue 2 (bonus has gone from 0.6% to 0.5% tho).

Don't know if others are doing the same.

On the up side have applied for Icici bank HiSAVE account @ 5.40% AER (to add to my derbyshire reg save and replace my A+L online saver).
Hope they keep this rate for a while and not just while they sucker people in.

Nationwide's hard-copy Summary Financial Statement says:

"The combined competition in the mortgage and savings markets will continue to put downward pressure on interest margins"

and also

"conditions in the retail savings market are likely to be significantly more competitive in 2005".

(This despite the fact that at the time the report was written, 18th May, they were not forecasting a fall in BOE interest rates and in fact still some upside risk)

But the news that the A&L has closed their e-account to new savers, even after a .35% drop seems a bit more dramatic than this and I'd like to know what is behind it.

Even more dramatic is the fate of Birmingham Midshires. As mentioned elsewhere, they had a 1-year savings bond yielding 5.61% last June. Just checked and their latest issue is now down to 4.50%!

Even their standard e-savings account is only offering 4.60%.

Once consistent players towards the top of the best buy tables, they seem to have vanished.

B & B e-savings account interet rate is being reduced to:

From 18th July 2005, we will be lowering the interest rate paid on your
eSavings account to 5.10% gross p.a. / 5.10% AER* (4.98% gross / 5.10%
AER* for monthly interest).

After reading that, erd, I went and looked up the Birmingham Midshires again - and sure enough - yet another reduction. Their 1-year savings bond is now down to 4.25%, when you can still get around 5% in fixed rates elsewhere. What's going on?

Maybe they are worried about bad debt and want to save some money?

I am tempted by the Icici bank's 5.4% offer, anyone know someone who has taken the plunge and what their reaction was?

Nope, I'm a bit weery of them - don't know why. I've got half in Cahoot and half going into First Direct (5.1 and 5.2 respectively).

So why are you weery of them ? Well let me guess, is it something to do its an Indian Bank !! ????????

Nope, its because I've never heard of them.

The account opening process at icici is very long winded. Been waiting a month and only got my log in id today. Still not got my password tho! Says it will be within next 6 days. It's meant to be a big bank in India. Look savings and chat forum at http://www.moneysavingexpert.com/ for more info on it. Few people there are singned up and sayin it runs smoothly once you r in.

Unfortunately their name sounds a bit like BCCI:

http://en.wikipedia.org/wiki/Bank_of_Credi...e_International

Not a good association.




Did you send the cheque to open the account as soon as you received the e-mail?

I looked at First Direct but didn't like this from their ad;

instant access to your money (although no interest is paid in any month you make a withdrawal).

So, does that mean that if you withdraw any amount you get no interest on the total amount in the account for a whole month?

Good question - I also spotted that and it put me off for the same reason. Occasionally I transfer a few K out to help with cash flow but in my case this could mean losing around £600 in interest

Put me off too. I guess you could put half in there, knowing that you would never touch it. Just make sure you take it all out the day after they pay interest!