Since the Bank of England cut the base rate in August and lenders followed suit by slashing interest rates, it has been a struggle for savers to find inflation-busting accounts.
Higher-rate taxpayers now need to be earning at least 4% gross just to stand still, making the choice of savings account more important than ever.
Unfortunately, with providers adopting new tactics to gain custom such as advertising headline-grabbing rates on accounts that turn out to have a number of catches, or slapping restrictions on so-called easy access' accounts deciding where to put your money isn't easy.
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Yet there are some decent accounts out there; you just need to be sure where you stand. Alliance & Leicester (A&L) is the latest to jump on the bandwagon with the lure of 10% interest on its Premier Regular Savings account, and as long as you adhere to their conditions, it is one of the most generous deals around.
To qualify, you have to open a Premier or Premier Direct Current Account and state that you want to open a savings account as well. The offer closes on 30 November, so you'll need to act fast. Payments into the savings account are also restricted to between £10 and £250 a month for a year, limiting the maximum interest to £150. At the end of the year, or earlier if you make any withdrawals, the savings account will be closed and the money swept into your current account.
The good thing about this offer, however, is that unlike most current accounts, Premier Direct pays an annual equivalent rate (AER) of 5% on balances up to £2,500 and offers a 0% overdraft rate for 12 months. The price comparison website Moneysupermarket.com says that "short of dragging people into their branches", it's hard to see what A&L could do to persuade people to switch to a better current account.
Another good account is the Derbyshire Building Society's post or branch access Regular Savings account (08456-004005, www.thederbyshire.co.uk). Although the official rate is just 2.7%, you qualify for a bonus rate of 5.4%, provided you save between £10 and £1,000 a month, don't miss more than one monthly payment a year, and don't make more than one withdrawal (no notice needed).
Unlike A&L's offering, there is no fixed life to the account and, although they can change the rate, the Derbyshire has a very good record and usually ups its rate about a month after the Bank of England increases base rates. In any case, provided you haven't made a withdrawal, you can close the account if the rate becomes uncompetitive and still qualify for the bonus.
As for straightforward, easy-access savings accounts, three of the best are ING Direct (4.75% on balances of £1 and above), Anglo Irish Bank's Easy Access deposit account (4.8% on £500-plus) and Newcastle Building Society's Net Savings (4.9% on £1-plus).
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