Friday 09 May 2008
Compare savings accounts to see who offers the best rates
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Savings are very precious and should be nurtured accordingly in accounts offering the highest interest. Through this website you can compare some of the market leading easy access accounts and see which banks offer the best savings rates.

Building a nest egg for the future through regular or even lump sum savings provides peace of mind for retirement and can make big expenses, such as a deposit for a house or paying for a wedding, achievable. 

While there are plenty of accounts paying over 4%, the market is littered with many more paying much less - some less than 1%. 

To put that into perspective, if you have £10,000 in one of the worst offenders paying a derisory 0.6%, you'll earn just £60 a year before tax. Switch it to one of the best deals and you could earn £500.

Once you have made the most of your annual ISA allowance which enables you invest up to £3,000 in mini cash ISAs every year free of income and capital gains tax, you need to ensure the remainder of your savings are placed in accounts which are going to generate the greatest return.

However, savers in the UK have literally billions of pounds languishing in accounts which deliver a negative return because the interest rate does not cover the effects of inflation and tax.

Some experts argue that accounts where saving pots would be worth less in the future than they are today should not even come under the savings classification, however the Banking Code, which is a voluntary code of practice, is powerless to ban banks from calling them 'savings'. 

Traditionally, the longer you tied your money away the better the interest rate. So notice accounts - where you have to give 30, 60 or 90 days' notice to withdraw your money without penalty - were viewed as the best way to get a competitive rate.

But in the past two or three years this theory has been rejected as the rates available on the best easy access or no-notice accounts have started to outperform those offered on notice accounts. Increasing competition from foreign banks has led to a rate war as banks vie to offer eye-catching accounts. This trend began when Dutch ING Direct burst on to the scene in May 2003 and threw down the gauntlet to the other banks by offering a simple, 'no catches' savings account with a market-beating rate. Since the arrival of ING and more recently Indian bank ICICI,  traditional providers have been forced to react and pay better rates of interest.

Best rates are to be found with an online account

When it comes to savings, the internet is your friend. As cosy as branch based accounts may seem, you need to spurn them as the best savings rates for easy access accounts are to be found online. Use the comparison search above to compare the current rates.

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