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Not wanting to tempt fate, but it seems that things are getting better for savers on a weekly basis at the moment...
Having been hammered during the interest rate falls between October last year and March, those seeking a decent return on their hard earned cash are now the main beneficiaries during this stable interest rate environment.
Yet as we highlighted in last week's article 'How the nation's savers could net £7.7billion', millions of people have yet to take advantage of the great rates currently available. So if you've yet to move your money into a higher paying account, don't put it off any longer.
Up until the last few weeks, it's been those who have money they can afford to lock away that have benefited from the savings war, but the battle has moved to the easy access market as well now, with rates edging ever nearer 3.50% - not bad given that the Bank of England base rate is just 0.5%.
Coventry Building Society's new 1st Class Postal Account is paying a leading rate of 3.30% - move £10,000 into this account and you could earn £315 more in gross interest over the next 12 months than if the money was kept in an account paying the average instant access rate of just 0.15%.
Are all easy access accounts the same?
While savers can take advantage of rates well-above the base rate, there are catches you need to watch out for.
Coventry's 1st Class Postal Account is a prime example: The minimum investment is £1,000 and while you can make additional deposits once the account has been opened, you must pay in at least £1,000 each time.
Despite being an easy access account there are also restrictions with withdrawals. Only four penalty-free withdrawals are permitted each year - make more than that and you'll lose 50 days' interest each time you take money out. What's more, if you do want to take money out of the account, the minimum you can withdraw is £1,000 at a time.
One of the main issues for smaller savers interested in netting the top easy-access interest rate is that the Coventry account requires a minimum investment of £1,000. Those wanting to top up the account can also only do so once they have at least £1,000 more to pay in.
Before signing up for this account, you therefore need to make sure you can adhere to the relatively strict terms and conditions.
It's also worth noting that the 3.30% headline rate is variable, and it includes a 1.30% bonus which lasts for the first 12-months. This shouldn't put you off as most of the leading easy access rates include introductory bonuses - you just need to make a note to check the competitiveness of the account once the bonus ends: if at that time you can get a better rate elsewhere, move your money again.
There are other competitive easy access accounts to choose from if you want a deal with fewer restrictions. Alliance & Leicester's Online Saver Issue 5 and Birmingham Midshire's Telephone Extra accounts, for example, both pay 3.15% on balances of £1 or more. 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 3.0%. 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. For more easy access rates, visit our savings channel.
What about fixed rates?
If you do have money you can afford to lock away for a few years you can earn even more in a fixed rate bond. This type of account doesn't suit everyone however, because you cannot usually add more money after the initial investment and withdrawals tend not to be allowed during the fixed rate term.
The leading deals are paying more than 5.0%. However to get that rate you have to tie your money up for five years and the risk of that in the current environment is that you could find yourself stuck in a deal that becomes uncompetitive. With the base rate at a record low, interest rates will have to start rising at some point.
Obviously, we don't have a crystal ball so it's impossible to say when interest rates will go up and by how much - the consensus among economists at the moment is that base rate is likely to remain at its current level for the rest of this year and start increasing at some point in 2010. How quickly they then rise will depend on the state of the economy.
With so many uncertainties, you may therefore prefer a shorter-term bond. There are a number of three-year deals paying 4.50% or more. ICICI Bank's three-year Fixed Rate HiSave Account has a rate of 4.60% - the minimum investment amount is £1,000. Alternatively, West Bromwich Building Society's E Bond 27 is paying 4.55% until July 31 2012 on balances of £5,000 or more, while Yorkshire and Cheshire building societies and Clydesdale Bank all have three-year deals at 4.50%. Make sure you check the minimum investment requirements though as some are high - Yorkshire, Cheshire and Clydesdale all require savers to deposit at least £25,000.
If you'd prefer a two-year deal, The AA Internet two-year bond and ICICI Bank's two-year Fixed Rate HiSave Account are both paying 4.35%. The minimum investment on The AA's account is £500, whiles ICICI requires you to pay in at least £1,000.
The rates on one-year fixed rate bonds are a bit lower - that said the leading deals are paying more than the best easy access accounts so if you have money you won't need to dip into over the next 12 months, they're worth considering. The Post Office's One-year Growth Bond is paying 3.85% on balances of £500 or more, while Abbey's One-year Fixed Rate Bond has a rate of 3.75%. The minimum deposit on this account is high though, at £25,000.
Remember: If you have a large amount in cash savings, spread your money around between different institutions, because under the terms of the Financial Services Compensation Scheme, only the first £50,000 is protected (£100,000 on joint accounts). For more on this read Clare Francis' article 'Who owns who?'.
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.
