Sainsbury's move could spark savings accounts price war

13 June 2007
Banks could flock to offer savings accounts with interest rates of six per cent or more to online customers, has predicted, as Sainsbury's Bank launches its six per cent interest Internet Saver account.

Sainsbury's joins the select few instant access savings products currently paying customers more than 0.25 per cent above the Bank of England base rate.

The internet bank raised its interest rate to six per cent from 5.75 per cent in spite of the Bank of England's Monetary Policy Committee's decision to hold the base rate steady this month.

But "over the coming weeks", more banks could improve interest rate incentives for customers cottoning onto the potential to earn interest as the base rate rises, commented the finance site's chief executive, Sean Gardner.

Checking the account's track record over the past few years, as well as how it plans to cope with future base rate changes, will help you select the best deal, he suggested.

The Sainsbury's Internet Saver account has tracked above the base rate since its launch in 2005, but commentators are now predicting the start of a price war in savings rates.

Find out more about Sainsbury's Bank savings accounts

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