Offline? It shouldn’t cost you
SAVERS who can’t go online for the best rates do not have to put up with the duff deals offered by big banks.
Much better options are available in the High Street, at local building societies and small banks. Failing that, accounts can be run by post or over the phone.
Millions of savers are missing out because they do not use the internet, where, typically, the best rates on easy-access and fixed-rate savings accounts are to be found.
For example, the best online rate on popular easy-access accounts is currently 1.5 pc from Marcus by Goldman Sachs, which includes a 0.15 percentage point bonus for the first 12 months. On £10,000, this gives you £150 interest a year, including the bonus.
But Halifax, once the stalwart of savings banks, pays just 0.2 pc in the High Street on its Everyday Saver — or just £20 interest.
Wily savers can close this gap by switching to a top-paying provider. Even if you don’t live near a branch of one paying a top rate, you can still pick up competitive rates by running your account by phone or post.
Easy-access accounts are the most popular with savers, who hold more than £740 billion in them. Some of these accounts, available by post or in the High Street, pay 1 pc or more.
Among the best deals in the High Street is Kent Reliance, which operates through nine branches in the South East and pays 1.4 pc on its Easy Access account.
Coventry BS, which has around 70 branches, pays 1.15 pc on its Easy Access account.
Virgin Money Easy Access Saver, on offer at its 73 branches around the country, pays 1.16 pc. Newcastle BS Community Saver pays 1 pc, which is available at its 27 branches, and Scottish BS, with six branches, pays 1 pc on its Instant Access account. Family BS offers a higher 1.21 pc on its Branch Saver, but it only has one branch in Epsom, Surrey.
Kent Reliance and Scottish BS also let you open and run their accounts by post, while Coventry BS and Virgin Money let you operate them over the phone as well as by post.
Fixed-rate bonds from smaller providers also beat the big banks hands down. On oneyear fixed-rate bonds, the top High Street rates include Kent Reliance at 1.7 pc, Cambridge BS at 1.65 pc and Yorkshire BS at 1.55 pc. In contrast, NatWest pays just 0.8 pc for one year and Lloyds 0.65 pc for two years.
You can also find good fixed-rate bonds on offer through the post. Among the top shortterm bonds are those from Charter Savings Bank, which, unusually for a new bank, offers its accounts online and through the post.
It pays 1.9 pc for one year or 2 pc for 18 months. You can also take monthly income, at 1.88 pc and 1.98 pc respectively.
Your cash is covered by the Financial Services Compensation Scheme in the same way as for big banks and building societies. This gives you up to £85,000 of cover — or £170,000 on joint accounts — if your provider goes bust.