100 new savings accounts launched in a year!

More than 100 new savings accounts have been launched this year by banks and building societies, desperate for cash from High Street savers. But they have left their older accounts paying rates aligned with the low base rate. So savers must be prepared to switch more often to make the most of their money and keep up with these launches.

Some easy-access accounts now pay more than 3 per cent before tax, even though Bank of England base rate has stayed stubbornly at 0.5 per cent since March.

And savers will have to carry on keeping a watchful eye on their rates.

money

Gold rush: New accounts are designed to jump to the top of best buy tables and rake in savers' cash

New top rates are often boosted by a short-term bonus - or they come with complicated terms and conditions which mean the account might not suit you.

Banks and building societies are competing for a shrinking pool of money as consumers, who are feeling the pinch, use savings to pay off debts.

The increase in the amount of money going into savings in the first ten months of this year is only around a third of the 2008 level.

And as the end of the year approaches, savings providers are looking to meet their annual targets, making the competition even fiercer.

In April this year - just after base rate fell to 0.5 per cent - the top rate you could earn on an internet account was 1.68 per cent after tax (2.1 per cent before). Now the best deal is 2.52 per cent (3.15 per cent) (see Best Buy table above).

In the High Street the top deal was 1.52 per cent (1.9 per cent) but now you can earn 2.68 per cent (3.35 per cent) with West Bromwich BS. But when looking to switch, watch out for traps. For example, the new Chelsea Rainy Day Savings Issue 4 easy access account, available through its branches and the post, pays 2.6 per cent after tax (3.25 per cent before) on a minimum £10,000.

The rate includes a 1.2 percentage point (1.5 point) bonus for one year. But you are limited to taking out £5,000 from the account in the first 12 months and the minimum withdrawal is £500. If you want to take out more, there is a £25 charge.

West Bromwich's new Branch Bonus Account 2 pays an even higher 2.68 per cent (3.35 per cent) including a 0.52 point (0.6 point) bonus until October 31 next year on a minimum £100. But you are limited to just two withdrawals a year - make any more and your rate plummets to 0.52 per cent (0.65 per cent).

Loyal savers with the building society cannot switch their existing savings - on which they can be earning as little as 0.04 per cent (0.05 per cent) into this new deal.

sy.morris@dailymail.co.uk

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