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Fixed rate bonds continue to offer best savings rates

04 August 2009 / by Rebecca Sargent

Fixed rate bonds continue to offer the best savings account rates, despite recent additions to the easy access savings market, MoneyExpert.com has claimed.

Nationwide yesterday launched its Champion Saver account, which provides an interest rate determined by the average top five branch-based instant access, limited access and notice accounts from its competitors.

However, with an interest rate of 2.80 per cent, experts are doubting its competitiveness against fixed rate bonds. Pierre Williams, head of research at MoneyExpert.com said:

"The 2.80 per cent that the Champion Saver now offers is strong but doesn't compete with the best fixed rate bonds available if you're prepared to set your money aside for a longer period. It doesn't even take the top position in terms of those offering an average rate of other high paying accounts."

In fact, the Investec High 5 account, which takes an average of the top savings accounts in the market as a whole currently offers 3.17 per cent, 0.37 per cent higher than the Champion Saver.

Commenting on the Investec savings account, Linda McBain, head of banking at Investec Private Bank said: "It is important to closely monitor the rate of interest you are receiving on your savings and if you feel that it is no longer attractive, switch to a better paying account.

"Ideally you want one that has a track record of paying a steady and attractive rate, which is what we seek to do with our High 5 Account," she adds.

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