The best savings rates around

Wednesday, 17 June 2009

Many pensioners have some savings, and used to be able to live on interest proceeds. This is mostly no longer the case as interest rates have tumbled in the last 12 months. Good savings rates are difficult to come by in these days of low interest rates, and the Monetary Policy Committee of the Bank of England again voted to keep the Bank’s base rate at 0.5% for June.

If you have a maturing bond or similar, then you are going to have difficulty in matching the interest rate that you previously had. However, there are some relatively decent savings rates around, though some have certain restrictions.

Given that the only way that interest rates are going to go is up, it is unlikely that you will want to fix a rate for your savings for very long. A one or two year bond would seem the most sensible.

The Bank of Ireland has on year Fixed Term Deposit Account at 3.8% gross, available to personal customers depositing new or additional funds to the Bank of Ireland Group or depositing funds from a maturing Bank of Ireland Limited Edition fixed term deposit account. Minimum deposit is £2,000. Ireland guarantees 100% of savers’ funds, but investors are reliant on the Irish compensation scheme in the event of a bank failure.

ICICI HiSave is covered by the Financial Services Compensation Scheme up to £50,000. It has a one year fixed rate of 3.75% for a minimum deposit of £1,000. If you wanted to stretch to two years, the interest rate 4.35%.

For home-based banks and building societies, the Newcastle Building Society has a Fixed Rate E-Bond at 3.61% for a minimum deposit of £5,000.

The Derbyshire Building Society has a Fixed Rate Bond at 3.5% for a minimum deposit of £5,000. Remember that the Derbyshire is now part of the Nationwide, so don’t go over the £50,000 compensation limit.

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