The savings account market has become highly competitive since the credit crunch broke last summer, but savers should beware rate guarantees which are above the Bank of England base rate.
Moneyfacts.co.uk is warning savers to approach rate guarantees with caution and to keep an eye on the interest rate, because many of them could drop significantly once the fixed period comes to an end.
The run on Northern Rock last August saw customers queuing up in droves to withdraw their money, and the Treasury acted to guarantee everyone's deposits up to a certain limit, so now savings accounts
have been seeing a price war as they try to build up their deposits and scale back on mortgage lending.
Joanna O'Brien, savings analyst at MoneyFacts.co.uk urges savers to read the small print of fixed rate savings accounts
carefully, and to keep watch over the interest rate both during the fixed rate period and after it finishes.
As an example, Ms O'Brien points to the Anglo Irish Bank's 7 Day Notice Issue 2 account, which guarantees the interest rate to be at least equal to the Bank of England's base rate. It currently pays 6.55 per cent, but with the base rate currently at five per cent, this could potentially drop by 1.55 per cent she warns.
And on some other products, the interest rate will be tiered, so the interest rate paid and returns gained will depend on the balance in the account, so savers need to be sure they are eligible before applying.
However, there are still some good deals to take advantage of, Ms O'Brien added. The Co-operative Bank Savings Plus account guarantees its rate for the life of the account, and the Scottish Building Society's Senior Scotsaver account ensures the rate will move in line with the base rate within 28 days, offering its customers some certainty.
Ms Brien concluded by saying that if consumers shop around and compare savings accounts
, then they can "obtain a far higher variable rate without worrying about rate guarantees that aren't worth the paper they are written on!"
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