One of our regular readers contacted us last month with a suggestion for an article. We thought this was a great idea so it will become an ongoing feature.
As many of you will be finding it is increasingly difficult to get decent savings and deposit interest rates. A combination of a historically low Bank of England base rates and high levels of inflation mean it is important to make sure you make the most of your savings. Otherwise you are faced with the very real prospect of the value of your money eroding over the years.
One of the things we regularly look at for our clients is who is offering the best interest rates - be it a cash ISA subscription or a fixed term bond or something else.
If you are happy to tuck the funds away then for as little as £500 you can open a 2 year fixed online saver with Halifax. As the name suggests this is an internet only account and the fixed term nature of the account means that no withdrawals are permitted during the term. The interest rate is 3.85% but remember that you will be taxed on the interest payable on this type of account.
With regards to cash ISA's, Northern Rock (soon to become part of the Virgin stable) are currently offering an eISA paying 3.05%. You can open this ISA with as little as £1. Again, we always recommend that you use your annual ISA allowance to take advantage of the tax benefits applicable to this type of account.
As with so many things the online rates are often marginally more favourable than the rates payable on the in-branch or telephone accounts due to the redcued overheads faced by the banks.
One important thing to remember with deposit account is the depositor protection limit of £85,000 per individual, per institution. Always ensure that you don't place morer than this amount with any one institution and remember that many of the banks and building societies are now part of larger global banking groups.
I will give you an update each month as well as offering some tips on where to look out for the best savings rates.