Alliance & Leicester has launched its Online Saver 5 today, offering a market leading rate of 3.15 per cent and sparking hope for savers nationwide.
Market experts are viewing the new Alliance & Leicester savings account as the start of competition heating up in the instant access saving account market.
Commenting on the account and the launch of a Coventry Building Society account paying 3.25 per cent to over 50s, Kevin Mountford, head of banking at moneysupermarket.com said:
"This level of activity is unusual given the Bank of England base rate hasn't changed since March. But it's great news for savers, particularly those who don't have money they can afford to lock away in a fixed rate account.
"Providers are still desperate for our cash so the competition is likely to remain strong for some time to come.
"Until the last few weeks, banks and building societies had focussed on fixed rates and Cash ISAs, with these products the most searched for on moneysupermarket.com but the tide is now turning," he added.
Other industry experts agree that the A&L account may have sparked market competition, Pierre Williams, head of research at MoneyExpert.com said: "Savers are scrambling for returns and chasing rates as they come on to the market. Anybody earning 2.5 per cent or more on their instant access cash is doing well but A&L's decision to offer a 3.15 per cent account stands out as one of the best deals on the market."
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