Savers cash in as bonuses average 0.58 per cent

But beware when bonuses end and rates drop, says MoneyExpert.com

Savers are benefiting from bonuses averaging 0.58 per cent on instant access accounts as companies fight for new business, new research* from MoneyExpert.com reveals.

The independent financial comparison website says some firms offer bonuses of as much as one per cent with the lowest at 0.15 per cent. And they include some of the best-paying accounts on the market such as Birmingham Midshiresí Internet Easy Access account. However the MoneyExpert.com research shows that only a third of bonuses are paid for a year with some running out after just three months. The majority of bonuses last for six months.

Sean Gardner, Chief Executive of MoneyExpert.com, said: ìSavings firms offer bonuses to tempt customers to switch their cash and when they are offering one per cent for a year it is well worth taking the offer.

ìSavers are in a strong position now after two Bank of England rate rises have seen returns rise across the market. Not all firms have increased rates in line with the Bank of England and savers should be looking around for better deals.

ìHowever bonuses are temporary and when they run out accounts that look the best on the market often become less attractive. Savers need to keep an eye on the rate they are being paid and if it doesnít measure up they should switch.

ìThe advice is always that savers need to look beyond the headline rates to the long-term return without the bonus. A good long-term rate often beats a bonus and savers need to be on their guard.”

Around one in 12 of the 465 instant access accounts currently on the market pay bonuses. However not all the best-paying accounts pay bonuses. IceSaveís Easy Access account for instance pays 5.45 per cent but does not rely on a bonus to tempt savers to invest.

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Notes * MoneyExpert.com analysis of the Defaqto Aequos Database, 21.12.06

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