Alliance & Leicester has indicated it is business as usual despite its pending takeover by Santander by upping the rate on its flagship savings deal.
The bank has today increased the rate on its eSaver account from 6.56% AER (including a 0.94% bonus) to a flat rate of 6.6%. This is the second interest rate increase on this product in recent months, and experts say it is another indication of just how competitive the savings market is proving to be.
Kevin Mountford, head of savings at moneysupermarket.com, says it is also an attempt by Alliance & Leicester to stand its ground as a reputable savings bank despite its imminent takeover.
“By repricing its eSaver to 6.6% without using the hook of a bonus, Alliance & Leicester is clearly demonstrating its desire to stay ahead in the savings game,” he explains.
Alliance & Leicester’s new look eSaver now pays a flat rate of 6.6% AER (variable), and guarantees to always pay at least 0.5% about the Bank of England base rate until 28 February 2010. However, bear in mind that this is not the account for you if you want to regularly dip into your savings as no interest is earned in any months where a withdrawal is made, with the exception of July.
The account, which is for balances of between £1 and £500,000, offers savers the choice of earning an annual rate of interest (6.6%) or receiving a monthly income of 6.41% interest, which is paid into your current account and is not treated as a withdrawal.
Hetal Parmar, manager for savings at Alliance & Leicester, says: "While the account is designed for long-term savings, it does provide the comfort of knowing you can access your money if you really need it, without notice.
"Many existing customers also use the account to supplement their monthly income, by having the interest paid to another account."
To see how Alliance & Leicester's new deal compares with other instant access accounts, and to find out what else is out there, read our daily round-up of the savings market.