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Prime time for savers
By Rebecca Atkinson
Following a spate of providers withdrawing their market-leading fixed rates, Alliance & Leicester has just launched a one-year fixed account paying 7% AER on deposits of between £1,000 and £1 million.
Fixed savings accounts are ideal if you don't want to see your interest rate changed during the life of the bond. At a time when the Bank of England is expected to cut interest rates, many savers are attracted to the security these products offer.
The A&L rate is currently the best on the market, but if you have less to invest then Anglo Irish Bank offers a rate of 6.75% AER on deposits of at least £500.
Or if you want to fix for longer, then London Scottish Bank offers a two-year product at 6.7% AER for deposits over £2,000.
Protect your savings from the taxman
Fixed rates do offer security, but with the end of the current tax year swiftly approaching, people who haven't already invested their £3,500 ISA allowance are running out of time to do so.
Scarborough Building Society offers the best headline rate of 6.3% AER but you will have to invest at least £1,000 and give 30 days' notice if you need access.
Savers who want instant access, should consider a new No Notice ISA from Icesave which pays 6.1% AER on savings over £1,000. Icesave also offers an interest rate guarantee of at least 0.3% above Bank of England base rate until 2011.
If you have less to put aside then Loughborough Building Society also offers an AER of 6.1% for deposits of just £1, although you will need to give 90 days' notice for access.
Instant access and internet accounts
Internet savings accounts are ideal if you want to manage your money online, but following Newcastle Building Society withdrawing its market-leading 6.43% AER account, the best headline rate is now offered by Bradford & Bingley. It pays 6.4% AER for deposits between £1 and £250,000.
If you require instant access to your funds but would rather manage your money by post or telephone, then Heritable Bank continues to offer its Easy Access account paying 6.46% on deposits of at least £1,000. If you have less to save then Anglo Irish Bank pays 6.3% AER on deposits of £1.
Best of the rest
If you are committed to making regular savings then Britannia Building Society has just launched a market leading account priced at 7.5% AER on monthly contributions of between £25 - £250. Previously, Skipton Building Society was offering 7.55% AER but this product has now been withdrawn. From 21 January, Skipton will launch a Special Saver product paying 7.3% AER for monthly deposits of between £10 - £250.
Finally, if you're a parent looking to set up a savings account for your children, then Halifax's one-year Children's Saver bond continues to outshine its competitors, paying 10% AER on monthly contributions between £10 - £100.
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