Top-paying savings bonds and ISAs

BM Savings (the former Birmingham Midshires) has launched a two-year fixed rate bond, paying 3.6% before tax (2.88% after tax) on a minimum £1 deposit.

The deal is available over the internet only. BM Savings is part of HBOS.

Sainsbury’s new two-year bond is also still available, paying 3.55% (2.84%).  

Coventry Building Society pays a slightly higher 3.7% (2.96%) for those willing to tie their money up for slightly longer – until December 2012.

BM Savings has also launched a two-year fixed rate ISA at 3.3% tax free, but you have to run the account through the post.

Northern Rock has a new ISA Breaker 3, minimum £500, paying 2.85% fixed for a year, one of the best deals on offer.

But you can't transfer in existing cash ISAs and at the end of the year you only have easy access to your money for 30 days, after which it becomes a 30-day notice account.

Meanwhile Manchester Building Society has delivered a sharp warning to savers that they need to check the rate they are earning regularly – even though base rate remains at 0.5%.

The society has cut rates by as much as 0.25 percentage points on some accounts closed to new savers. Its Premium Notice Issue 7 now pays 1.56% (1.25%). The first issue of Premier Notice pays just 0.26% (0.21%).

Stroud & Swindon Building Society became part of Coventry Building Society at the start of this month. It has closed some of its top paying accounts – including Bonus Guarantee and Postal Account - to new savers.

Savers at both Coventry Building Society and Stroud & Swindon at the time of the merger will continue to enjoy £50,000 cover at both brands under the Financial Services Compensation Scheme until 30 December. After this, the new European limit of  €100,000 (around £83,000) over both brands comes into effect.

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