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Sainsbury's launches 3% internet savings account

12 September 2009 / by Andy Davies

Sainsbury's Finance has launched a new online savings account offering savers a variable gross rate of three per cent AER.

According to research by the supermarket, only three per cent of instant access and notice accounts pay three per cent gross AER or more on balances of £1,000, while just over 21 per cent of these account allow savers to have the option of receiving their interest on a monthly or annually basis.

Helen Cook, head of savings at Sainsbury's Finance, believes the new account should prove popular with savers, she said: "Despite a competitive savings market, our analysis shows that there are very few savings accounts paying rates of interest of three per cent, so our new Online Saver account is extremely attractive."

The new Online Saver account will pay three per cent interest when opened on deposit balances of £1,000 to £500,000 for 12 months, provided savers do not make more than three withdrawals in the 12 month period.

If the number of withdrawals exceeds this number or the balance falls below £1,000 or above £500,000, the interest rate will revert to the standard rate of 0.5 per cent.

Commenting on Sainsbury's new account, David Black, banking specialist at Defaqto Limited, said: "The average rate paid by instant and easy access savings accounts is currently 0.85 per cent gross, so the 3.00% rate offered by Sainsbury's looks to be a very good deal for those who are confident that they can maintain a balance of at least £1,000 and make no more than three withdrawals over the course of a year."

Apply online for the Sainsbury's Online Saver»

© Fair Investment Company Ltd
 

ProviderAccountInterest Rate (AER)TermApply
1.00%Instant AccessMore Info >
MARKET LEADING: Earn 1.00% gross/AER Instant Access. No notice periods. Unlimited payments and withdrawals. Pay in from £100. RCI Bank are protected up to a total of €100,000 by the FGDR, the French deposit protection scheme. Manage account online.
0.75%Easy AccessMore Info >
0.75% gross/AER on balances from £1,000 to £1 million. Guaranteed to be at least 0.50% above Base Rate** until 31st December 2017. Unlimited withdrawals without restriction or loss of interest.
5.00%Current Account
Instant Access
More Info >
5.00% interest for 12 months on balances up to £2,500 for the first year. You must pay in £1,000 or more each month to receive interest (excluding transfers from any Nationwide account held by you or anyone else). 12 month fee-free arranged overdraft available. No monthly fee. Must be aged 18 or older.
5.00%Current Account
Instant Access
More Info >
5.00% interest on balances up to £2,000 PLUS 5% cashback on first £100 of Contactless payments every month. Must pay in a minimum of £500 into the account each month. No monthly account fee.
1.50%Current Account
Instant Access
More Info >
Monthly Interest of 1.50% AER (variable) payable on your entire balance up to £20,000 (3.0% AER until 1st November 2016). Monthly Cashback on selected household bills. Must pay in £500 into the account each month.
1.00%Current Account
Instant Access
More Info >
Innovative new banking service powered by Clydesdale and Yorkshire Banks. Get your current account and instant access savings account working together. Earn 1% AER on ALL instant access credit balances, and 0.5% AER on current account balances up to £2,000 until 30 November 2016. From 01 December 2016 the rate will be 0.25% AER (0.25% gross p.a. variable). INTRODUCTORY OFFER: Free for the first 12 months.
0.75%Easy AccessMore Info >
Earn 0.75% tax free/AER variable. Open with £100. Unlimited free withdrawals. Transfer in ISAs held elsewhere - no limit
0.35%Easy AccessMore Info >
Open with £1,000. Monthly and Annual Interest options. Access - Online, Telephone or Post. No notice period or fees on withdrawals.

Gross is the interest you will receive before tax is deducted.

AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.