The Monetary Policy Committee (MPC) will meet for the first time in 2008 this week (on 10 January) and is expected to freeze the Bank of England base rate at its current level of 5.5% - at least for now.
Forecasts suggest that further rate cuts are very much on the agenda and could even end the year closer to 4% than 5% in an attempt to revive the flagging housing market.
While this is all well and good for homeowners, it does place renewed urgency on savers to act quickly to grab the best deals. Already rates are falling with big-name providers such as Nationwide cutting the rates on some of its accounts by as much as 0.3%.
There are still some highly attractive deals on the market however, with the Alliance & Leicester eSaver leading the way by offering 6.50% AER. However, this market-leading deal comes with a catch as no interest is paid in any calendar month when a withdrawal is made - so the access isn't quite so easy after all. That's not to say this isn't a good deal - it is, but unless you are certain you will keep your money stored away it's best to look beyond the headline rates.
In this category, the ICICI HiSAVE Savings Account is arguably the best on the market. Not only does it offer an attractive rate of 6.41% AER, but there are no withdrawal penalties and its rate is guaranteed to be at least 0.30% above the base rate until 31st December 2011.
This account also gives you access to the ICICI HiSAVE Term Deposit one-year fixed bond deal. This is the leading one-year deal around with a rate of 6.85% AER although if a withdrawal is required prematurely this rate drops to 5.75% AER.
This ICICI savings account is quickly followed by Bradford & Bingley, which has bucked the trend by launching a leading 6.40% AER rate via its Internet Saver 2 account, which again is free from withdrawal penalties and carries no short-term bonus.
Remember too that if you have a lot of money to save, it's well worth spreading the cash around.
The Financial Services Compensation Scheme (FSCS) only safeguards the first £35,000 in any one account in the unlikely event that a banking institution collapsed. So to feel confident and secure that your hard earned money won't vanish faster than you can say 'credit crunch', spread your money across several high interest savings deals from different institutions.
Perhaps the most important message to savers in 2008 is to keep an eye on your money.
If you haven't reviewed your savings account recently then chances are you're not getting the best rate.
Once you've made your move keep your eye on your existing provider to ensure its rates don't fall faster and further than those from other providers. You can get an overview of the market using the savings account comparison tool, and of course we'll keep you informed of any major market moves through Rate Alert.
DISCLAIMER: Please note that any rates or deals mentioned in this article applied at the time of writing and may no longer be available/applicable today.
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