A review by Sainsbury’s Finance of 10 best-buy savings accounts(1) from February 2005 identified by Moneyfacts reveals that collectively they were paying an average of 5.23% interest, which was 0.48% above the Bank of England base rate at the time. However, just three years later, seven of these accounts are now paying less than the Bank of England base rate.
The average rate for these seven accounts in February 2008 is 4.63%, which is 0.37% below the current Bank of England base rate. The three best-buy accounts reviewed that are still paying above the base rate since February 2005 are the Sainsbury’s Internet Saver (5.50%), the Yorkshire Building Society e-Saver account (5.50%) and the Bradford & Bingley eSavings account (5.30%).
Neil Cameron, Savings Manager, Sainsbury’s Finance said: "Rates on savings accounts move frequently so it’s important to keep an eye on them and ensure that you are receiving a fair and competitive return. Savers should be aware that an account that features in today’s best buys will not necessarily be such a great deal tomorrow."
Since its launch in January 2005 Sainsbury’s Internet Saver has consistently paid a competitive rate, and was ranked number one internet savings account by Moneyfacts in its new 36-month consistency rakings, which tracks the rates paid by savings accounts for the past three-years.
This award is backed up by analysis by Defaqto that reveals that Sainsbury’s Internet Saver is the only instant or easy access savings account generally available to adults that has consistently paid a gross AER interest rate on a balance of £1 that is equal to or above the Bank of England base rate in each and every month since January 2005.
(1) Moneyfacts Magazine February 2005. Based on balances of £1,000.