Bonus rate savings accounts benefit savers Go compare with our comparison table

Bonus rate savings accounts benefit savers

03 June 2010 / by Lois Avery

Savers are choosing accounts with bonus rates to make the most of their money, according to moneysupermarket.com.

The low rate environment prevents banks and building societies from offering attractive savings deals but research from the price comparison website shows that  many savers are getting around this by taking opening easy access accounts which offer short-term bonus rates.

Nine out of the top ten easy access accounts now include bonuses which typically run for 12 months and bonus rates range from 0.69 percent up to 2.31 per cent. The average is currently at 1.66 per cent.

According to their research the best easy access savings account is the West Bromwich BS Direct Bonus Account 2, offering a rate of 2.9 per cent, which includes a bonus of one per cent on balances over £1,000. And for those looking for the highest rate on deposits of less than £1,000 the AA Internet Extra account offers a rate of 2.8 per cent, including a bonus of 2.3 per cent.

But moneysupermarket.com has also urged savers who take advantage of an account with an introductory offer to check when the bonus expires and set a reminder as rates usually plunge significantly after the bonus period.

Kevin Mountford, head of banking at moneysupermarket.com said: "At a time when so many accounts are offering low rates, bonuses are a great way for savers to get returns well above the 0.5 per cent base rate.

"Banks are looking for creative ways to encourage savers through their doors, and therefore use bonus rates to bump up the headline rate of the account. Savers should take full advantage of this approach but they need to be on the ball to make sure they are ready to switch once the bonus period comes to an end, otherwise you will be left on much lower interest rates.

"A really savvy saver could spend a long time benefiting from savings bonuses as long as they are willing to put a little effort in, usually every 12 months when rates expire.

“However some bonus rates are not fixed and savers should keep an eye on their accounts in case their provider decreases the bonus rate at short notice."

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