Tesco tops best saving rates as it increases interest
Tesco has raised the rate on its Internet Saver account for new savers to 1.55% before tax (1.24% after tax).
The rate makes it the top payer on easy-access internet accounts with no restrictions on how many times you take money out during the year. The rate includes a 0.8 (0.64) percentage point bonus payable for the first year.
Coventry Building Society's Online Saver 5 pays slightly more at 1.6% (1.28%) but you are limited to three withdrawals a year from the account.
The top deal with no withdrawal restrictions which is not boosted by a short-term bonus comes from State Bank of India at 1.5% (1.2%) and Kent Reliance at 1.45% (1.16%).
On branch-based accounts, the best deal comes from Virgin Money Access Saver at 1.51% (1.21%).
Fixed rate deals have been falling with the top one year rate at 1.95% (1.56%) from Shawbrook Bank followed by State Bank of India at 1.85% (1.48%) and Britannia, part of the Co-op Bank, at 1.84% (1.47%).
For two years you can earn 2.4% (1.92%) with Shawbrook Bank, 2.35% (1.88%) with State Bank of India and 2.27% (1.82%) with Post Office.
On tax-free cash Isas, the best easy-access deal comes from Post Office at 1.8% including a 0.9 percentage point bonus for the first 18 months. The account limits you to two withdrawals a year but you can transfer your existing cash Isas into the account.
The top rate which is not boosted by a bonus comes Virgin Money at 1.75% and the bank accepts transfers from other providers.
On fixed rate cash Isas the top one-year deal comes from Bath Building Society at 1.9%, but the account is only available for those looking to put away this year's cash Isa allowance. The best deal which accepts transfers is Britannia at 1.85%.
For two years you can earn 2.25% with the new account from Post Office, where the deposit taker is Bank of Ireland. Coventry pays 2.75% fixed for just over three years but does not accept transfers. The top rate over three years which will allow you to transfer your existing cash Isas in comes from Virgin Money at 2.4%.
This article was written for our sister website Money Observer
There are limits to how much you can invest in any tax year. For 2011/12, the limit is £10,680. Of that, the maximum you can invest in cash is £5,340 and the balance of £5,340 can be invested in shares (individual company shares or investment funds). If you don’t take the cash ISA allowance, you can invest up to £10,680 into a stocks and shares ISA.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.