Savers To Benefit From New Accounts

• News
• Published: 03 Jul 2009 in Money and Savings

Coventry Building Society and Alliance & Leicester are launching two new easy access savings accounts with best buy rates.

Coventry`s eSave account offers the over-50s interest of 3.25% fixed for a year with unlimited penalty-free withdrawals, and Alliance & Leicester is offering a new online saver with a rate of 3.15%.

The move shows that competition is returning to the savings market which has been hit by record low interest rates since the Bank of England cut the base rate from 5% in October to 0.5%.

Intelligent Finance and ING Direct are among five leading banks to increase the rates they offer savers, and a further five have launched easy access accounts in the past three weeks to tempt savers back to the market.

Banks are also looking to launch internet accounts, which are cheaper to run, with higher interest rates to get savers to deposit cash with them and boost other activity within the bank, such as mortgage lending.

Attention has moved from fixed rate accounts and cash Isas, which reward savers who are prepared to lock up their money for a fixed period of time with higher rates, as they are finding it harder to compete with such a low base rate.