Good news for savers - at last

interest on savings accounts: Good news for savers at last - at Moneyweek.co.uk - the best of the week's international financial media.

Things are looking up on the savings front, says Helen Monks in The Observer. The Bank of England may not have raised the base rate this month, but in anticipation of future rises, the banks are preparing to do battle. Halifax has just launched an account that pays "an inflation-busting" 6.05% gross for those who can save between £25 and £250 a month for the next year. And this can only be good news, says Faith Dewey in The Daily Telegraph, given that three in four deposit accounts currently fail to pay basic-rate taxpayers a "real return" (ie enough interest to preserve the purchasing power of their capital against inflation). Indeed, according to the survey of 741 accounts by Bates Investment Services, only 50% pay enough interest to keep non-taxpayers' savings growing faster than inflation, while only five of them preserve the value of higher-rate taxpayers' spending power. Of these five, three were from Northern Rock, which pays 4.35% on all three; one was from Chelsea Building Society's 60-day notice account, the PostSaver 60, which pays 4.5% gross (this includes a 0.5% bonus for the first year); and the fifth was from ING Direct, which pays out 4.41%.

However, before you move, ask yourself if you are prepared to switch accounts regularly to keep up with the best rates, says Clare Francis in The Sunday Times. Since more than half of the top-paying instant access accounts stayed in the best-buy tables for only two months over the past six years, you may well be better off with a consistent payer. The most consistent over the past three years are Halifax's WebSaver, which currently pays 4.05%; Egg's internet account, which pays 4% and is guaranteed to track the base rate until December 2007; and Nationwide's E-Savings, at 4%.

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