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Saga launches best-buy savings rate for silver surfers

Silver surfers received welcome news today with the launch of a best-buy instant access account.

Saga has introduced an online savings account for the over-50s paying 2.75%, to compliment its telephone and postal account offering the same interest rate. The rate includes a 1% bonus for the first year.

The rate beats the other over-50s instant access accounts by some margin, and is better than the interest paid on the equivalent accounts available to the wider market. For those under 50, the best rate comes from the Manchester Building Society at 2.66%, according to data provider, although the account can only be accessed through a branch or by post.

Moneyfacts does not list accounts that pay sizeable bonus rates in its best buys. There is a better rate for an instant access online account from the AA at 2.8% but this includes a 2.3% bonus payable for the first 12 months.

Also today, Northern Rock improved its savings offerings by launching a regular saver account, fixed at 5% until June next year.

Savers can deposit from £1 to £250 each month. Notice-free withdrawals can be made, interest is paid annually on 31  October and the account is available via the bank's branch network from tomorrow.

"Regular saver accounts are a great way to start building a savings nest egg, and a rate of 5% fixed for 12 months is excellent in the current

climate," said Andrew Hagger of "You currently need to fix for five years to get that."

The Nottingham building society has a slightly better rate for regular savers at 5.04%, but it only allows monthly payments of up to £100.

The new accounts are good news for savers but do little to improve on the exceptionally low interest rates being paid across the market.

Savers are hard pushed to find an instant access cash Isa or standard savings accounts paying more than 3% interest.

The best cash Isa comes from Barclays, which pays 3.10% on its Golden Isa. However, this includes a 1% bonus, which the bank is withdrawing for new customers from 2 June.

Those wanting to transfer an existing Isa balance to a new provider fare even more poorly. The best instant access rate for an Isa transfer comes from the Nationwide at 2.75% but to get it savers have to have an existing accountwith the building society.

Football fans might want to gamble on the building society's new fixed-rate savings bond instead, which will pay a market-leading rate if the England team wins the World Cup, and a decent rate otherwise.

In March, the consumer watchdog Consumer Focus launched a "super complaint" to the Office of Fair Trading, claiming banks and building societies are treating savers unfairly over cash Isas. The OFT has until the end of next month to respond.

Category: Savings

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