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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
1.30%Instant AccessMore Info >
MARKET LEADING. Earn 1.30% 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.
1.00%Easy AccessMore Info >
1.00% gross/AER on balances from £1,000 to £1 million. Unlimited withdrawals without restriction or loss of interest.

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.