Bradford & Bingley is introducing a new savings account which it guarantees will always beat the Bank of England's base rate.

The account, dubbed 'Rate for Life', will have an interest rate of at least 0.25 per cent above the base rate for its duration, according to the bank.

It launches with a variable rate of 5.25 per cent gross per annum.

Head of savings Paul Whitlock said: "The launch rate is competitive and is guaranteed to remain so for the life of the accounts, with no hidden catches or gimmicks."

Three versions of the account, which Bradford & Bingley claimed is "the first of [its] kind", allow customers to bank online, by post or in their branch, with a minimum opening balance of £1,000 for each.

Earlier this month the Halifax launched what it claimed to be the market leading savings account, which offers a gross rate of ten per cent and is available for a limited time.

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