The A&L Premier Regular Saver is linked to its
Premier Direct and
Premier 50 Current Accounts, while Abbey's Super Fixed Rate Monthly Saver is linked to its Reward Account and
Preferred In-Credit Rate Current Account. Both the current account and the linked savings account pay interest of 6.00%, which is fixed for 12 months. With the Bank of England base rate at just 0.5% such returns are impressive.
The 6.00% rate on the current accounts is only available on balances up to £2,500 and Abbey requires you to pay at least £1,000 a month into your account. A&L's minimum monthly deposit is lower at £500. It's also worth noting that the Abbey Reward and A&L Premier 50 deals also carry a £10 monthly fee - you do get benefits such as free travel insurance, but you need to evaluate whether you'll make use of those extras before signing up. And the Premier 50 account is only available to those aged 50 or over.
The linked savings accounts are regular savers and require money to be paid in each month - at least £10 into the A&L Premier Regular Saver and £25 or more into the Abbey Super Fixed Rate Monthly Saver. The maximum you can pay in is capped at £250 a month.
If you are looking to save on a monthly basis then these new products are well worth considering as they can't be beaten and don't be put off by the fact you have to switch your current account in order to benefit. The current accounts they are linked to are market-leading in themselves, so it's effectively a win-win - just make sure you pick the most suitable account for your needs. One thing that is worth pointing out however, is that existing Abbey and A&L current account customers don't qualify - the 6.00% regular savings account is only available to those who switch their current account over from another bank.
What other savings options are available?
A regular savings account may not be what you're looking for. They aren't suitable if you want to save on an ad hoc basis as most require you to make a deposit every month; you can't normally access your money during the term (usually 12 months); and because the maximum you can pay in is capped, they're no good if you're looking to invest a lump sum.
If you're not sure which savings account is the most suitable, watch our video 'Choose the right savings account' and read our article 'How to choose a savings account'.
Easy access
If you want to retain access to your savings the leading accounts are paying around 3.0%.
Coventry Building Society's 1st Class Postal Account has the highest rate at 3.30% although this includes a 12-month bonus of 1.30%. However, there are a number of restrictions you need to be aware of as you may decide it's better to opt for a slightly lower rate in return for greater flexibility.
The minimum balance is £1,000 and you can only make four penalty-free withdrawals a year. It's also worth noting that if you do want to take money out, the minimum withdrawal is £1,000.
If you'd prefer an account with fewer restrictions, Alliance & Leicester's Online Saver Issue 5 and Birmingham Midshires' Telephone Extra accounts, for example, both pay 3.15%. The rates include a bonus - A&L's lasts until August 2 2010, while the introductory rate on the Birmingham Midshires' account is a 12-month offer.
Alternatively, Citibank's Flexible Saver Issue 5 is paying 3.10% - this includes a 12-month bonus of 2.10% - while ING Direct's Savings Account pays 3.00%. This rate is fixed for a year after which the rate switches to ING's standard rate, which is variable and is currently 0.5%. These four accounts all allow unlimited penalty-free withdrawals.
Fixed rate
If you have a lump sum to invest, and can afford to lock your money away for a few years, consider a fixed rate bond. The rates are higher than those on easy access accounts.
Barnsley's five-year Online Bond is paying the leading rate at 5.40%. However, you won't be able to access your money during the fixed term.
If five years is too long, Barnsley's 5.00% three-year bond is also the best in the market - the minimum deposit is just £100. Other options include ICICI Bank's three-year Fixed Rate HiSave Account at 4.60%, available for deposits of £1,000 or more, while Aldermore and West Bromwich building society have three-year bonds paying 4.55%.
Aldermore has the leading two-year bond at 4.43%, while ICICI Bank and The AA have two-year deals at 4.35%.
If you can only afford to lock your money away for a year, the leading deals are the Post Office Growth Bond, which is paying 3.85%, while Derbyshire Building Society's Fixed Rate Bond Issue 178 has a rate of 3.75%, fixed until August 31, 2010.
For more information on savings rates, visit our savings channel. Visit our weekly poll to share whether you prioritise rate or security in a savings account.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing. Products underlined can be applied for directly.
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