Savers should be aware of the volatility of savings accounts for larger deposits as few remain ‘best buys’ in the long-term, says Investec Private Bank.
According to Investec’s Savings Index1, just two savings accounts for balances of £25,000 or more, revealed as top ten ‘best buy’ accounts during the three month period ending 27 October 2007, were also in the best buy table for the three month period ending 27 April 2008.
These accounts are offered by Investec Private Bank and the Britannia Building Society.
Accounts with the best returns of interest for balances of £25,000 or more (including bonuses)
|Three months to 27 October 2007||Three months to 27 April 2008|
|Abbey Super 50+||Britannia BS Homesaver|
|Britannia BS Homesaver||Abbey eSaver Direct|
|Coventry BS Sixty-Plus Saver Iss 2||Birmingham Midshires e-Saver|
|Chelsea BS Double Guarantee 2nd issue||Abbey Instant Access Saver|
|West Bromwich BS Premier Bonus Tracker 3||Heritable Bank 60 Day Notice Issue 1|
|Investec Bank (UK) High 5||Leeds BS Postal Tracker Account|
|Nottingham BS Postal Tracker 60 Issue 7||Investec Bank (UK) High 5|
|Leeds BS Online Freedom 50||Birmingham Midshires Guaranteed Reward|
|Heritable Bank 90 Day Notice Issue 5||Alliance & Leicester eSaver|
|Scarborough BS Direct Exclusive Saver||Kaupthing Edge Savings|
Investec is urging consumers to check that their savings are deposited in accounts paying consistently high rates of interest and to be alert to those banks or building societies which fail to do so.
Linda McBain of Investec Private Bank commented: "Savers should look beyond the introductory headline rate, as these will often include bonuses, which once expired can leave savings earning lacklustre returns. Consistency is key when selecting a savings account, as people generally deposit savings for a significant length of time. There is little point in selecting an account if six months later the rate drops dramatically."
Looking at consistency rather than the highest rate for a short period, data from Investec’s Savings Index shows that between 27 January and 27 April, the following five accounts were identified as being the most attractive for savers with balances of £25,000. Of these, Investec’s High 5 account2 and Britannia BS’s HomeSaver offered consistently higher rates for the period.
Best gross rates of interest for balances of £25,000: most consistent
(for the period 27 January to 27 April 2008)
|Company||Account||Interest rate (gross)|
|Investec Bank (UK)||High 5||6.43|
|Coventry BS||Sixty-Plus Saver Issue 2||5.75|
|Northern Rock||Tracker Online||5.74|
|Anglo Irish Bank||7 Day Notice||6.10|
Investec Private Bank does not rely on bonuses to offer attractive returns. It aims to provide its clients with some of the most consistently competitive rates in the savings marketplace and to be as transparent as possible with them. The Investec High 5 account currently pays 6.55% gross AER3.
To find out more about the Investec High 5 Account or Investec Private Bank’s other unique cash products, please call 0845 366 6333 or visit www.investecprivatebank.co.uk/high5
Findings from the Investec Private Bank £25,000 Savings Index can be found free at www.investecsavingsindex.co.uk
1 Investec Private Bank’s Savings Index tracks on a six monthly basis interest rates on savings accounts for balances of £25,000 using data provided by Moneyfacts.
2 The rate is based on the average of the top 5 savings rates published on the Moneyfacts website www.moneyfacts.co.uk across the categories of no notice accounts, notice accounts, internet accounts, monthly interest accounts, accounts for the over 50’s and accounts with an introductory bonus. The rate is correct as at 18 June 2008.
3 The Annual Equivalent Rate (AER) is a notional rate, which illustrates the contractual interest rate as if paid and compounded on an annual basis and is subject to variation.