Today's best saving rates

7 April 2008


The fixed rate savings market has got a little more competitive following Icesave's launch of a one-year fixed account paying 7.01% AER.

The account requires a minimum deposit of £1,000 but if you have less to save then Birmingham Midshires pays 6.81% AER for one-year on deposits from £1. It also pays 6.87% AER with its six-month account.

Elsewhere, Cahoot offers an account fixed at 6.88% AER until 30 October 2008 on deposits from £1, or Heritable Bank has a one-year account paying 6.8% AER on deposits of £1,000.

Fixed rate accounts AER Term Deposit

Source: Moneyfacts 02/05/08

Icesave 7.01% One-year £1,000
cahoot 6.88% 30/10/08 £1
Birmingham Midshires (online) 6.87% Six-months £1
Birmingham Midshires (online) 6.81% One-year £1
Heritable 6.8% One-year £1,000


Opting for a fixed rate account at the moment could be a good move if interest rates are cut on 8 May.

But if you haven't yet utilised your ISA allowance for 2008/09 then this should be the first place for your savings.

The first thing to decide is whether you want to fix your interest rate or opt for more flexibility with a variable rate. The Bank of England chopped interest rates in April and many economists predict it may do the same in May.


So, if you are happy to lock your money away for a set period of time then the security of a fixed rate ISA might be for you.


If you've got the full £3,600 to deposit then Principality Building Society offers a competitive 6.6% AER six-month account. This account accepts transfers from previous ISAs.

Or Bradford & Bingley pays 6.25% AER on its one-year account, and Julian Hodge Bank pays 6.15% AER for one-year.

However, if you are prepared to put your money away for four years, then Halifax pays 6.2% on deposits from £500.

For people with smaller amounts to save, Nationwide and Birmingham Midshires both have accounts paying 6.15% for one year on deposits of £1.

If you would rather plump for a variable rate ISA, then the best rate on the market is from National Counties. It pays 6.26% AER on deposits from £1.

Barclays has re-launched its Tax Haven ISA paying 6.25% AER on deposits from £1. Bear in mind that this rate includes 1% bonus rate for 12 months.

Finally, Market Harborough pays 6.10% AER on deposits of £1, which includes 0.6% bonus until 31 April 2009.

Icesave also offers an account priced at 6.10% on deposits of £1,000 while Egg pays 6.05% on deposits of £1.

Finally, Scarborough pays 6.05% AER on deposits of £1,000 with its 30-day notice ISA.

ISA Accounts AER Fixed or variable Notice or term Deposit Introductory bonus
Source: Moneyfacts 02/05/08
Principality BS 6.6% Fixed Six-months term £3,600 n/a
National Counties 6.26% Variable None £1 n/a
Barclays Bank 6.25% Variable None £1 1% for 12 months
Bradford & Bingley 6.25% Fixed One-year term £3,600 n/a
Halifax 6.2% Fixed Four-year term £500 n/a
Nationwide 6.15% Fixed One-year £1 n/a
Icesave 6.1% Variable None £1,000 n/a  

Instant access accounts

If you want instant access and to manage your money online, then Birmingham Midshires' e-saver account pays 6.5% AER on deposits of £1 or Kaupthing Edge pays 6.5% AER on deposits of £1,000.

FirstSave offers an Easy Access online account paying 6.26% on deposits of £100 while Bradford & Bingley pays 6.15% on deposits from £1.

Or you could opt for ICICI Bank’s HISAVE Saving account which pays 6.17% on deposits from £1.

However, if you are considering an instant access account be aware than many come with a sting in the tail - for example, you might lose a month of interest if you access your cash or face your account being closed down altogether if you make too many withdrawals. Find out which instant access accounts come with strings attached in our review of this type of savings product.

Online accounts AER Notice Deposit
Source: Moneyfacts 02/05/08
Birmingham Midshires 6.5% None £1
Kaupthing Edge 6.5% None £1,000
FirstSave 6.26% None £100
ICICI Bank UK 6.17% None £1
Bradford & Bingley 6.15% None £1
Icesave 6.05% None £250

Best of the rest

If you are committed to making regular savings then Abbey has a fixed account paying 7.23% AER for monthly deposits of between £20 - £250.

If you are over 50 then you could consider a product from Coventry Building Society. It has extended its 60-plus notice account to the over 50s. The account has an AER of 6.2%, which includes a 0.60% bonus for the first year from account opening.

Finally, if you’re a parent looking to set up a savings account for your children, then Halifax’s one-year Children’s Saver bond continues to outshine its competitors, paying 10% AER on deposits from £10.

If you have less to save then Halifax's Save4it instant access account pays 5.55% AER on deposits of £1 and Yorkshire Building Society offers an instant access account paying 5.99% on deposits of £100.

To search and apply for other great saving rates click here.

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