Saving gets more interesting
Borrowers may be facing tougher times, but the outlook is definitely brightening for savers.
While mortgage providers are undoubtedly getting choosier about who they lend to (see below), savings providers are competing to pull in the cash – and to do that they need to offer better interest rates than their rivals.
But some just aren’t playing fair.
* Many offer short-term introductory bonuses to lure savers in and then slash their interest payments.
* Others impose complicated restrictions on deposits and withdrawals making it almost impossible to earn the promised rate.
* And others still offer so-called ‘guarantees’ that turn out to be not quite what they seem.
Rachel Thrussell, head of savings at Moneyfacts.co.uk, observes: “With competition hotting up, rates rising and new accounts being launched, it’s a perfect time to bag yourself a great savings deal.”
However, she warns: “But hand in hand with increased competition comes increased ‘creativity’.
“Some providers are attaching numerous terms and conditions to accounts to enable them to offer those very appealing interest rates.
“So it’s never been more important to look beyond the headline rate. If it looks too good to be true, then it probably is – unless you are willing to jump through a number of hoops.”
If you’re thinking about opening a new account, avoid these traps by looking for no-strings deals.
Several – including Bradford & Bingley’s Internet Saver, paying a market leading 6.4 per cent, Icesave Easy Access and AA Internet Access (both 6.3 per cent), Sainsbury’s Bank Internet Saver (6.25 per cent) and Yorkshire Building Society’s Internet Saver (6.2 per cent) – pay good rates without nasty surprises hidden in the small print.
