Tuesday 5th June 2007
Consumers looking for the best rate of interest on their savings account may be well advised to avoid the high street, an expert has claimed.
Susan Hannums, savings manager at AWD Chase de Vere, told the Guardian that interest rate rises offered by high street banks may not compete with online accounts.
Meanwhile, for those who prefer to do their banking in a land-based branch, she advised that there are financial services providers available with a history of consistently competitive rates.
The comments follow the news that HSBC has passed the full 0.25 per cent base rate rise imposed by the Bank of England in May on to its savings account customers.
"HSBCs rates were never good in the first place," Ms Hannums told the publication.
"Although it has passed on the full 0.25 per cent across the board, its not a great savings provider."
She added that customers with an online savings account from HSBC could stand to forfeit their interest if a withdrawal is made within a period stated in the terms and conditions.
However, she stated that regular savings accounts - which require a minimum monthly deposit - could be a useful tool for those wishing to save over an extended period of time.
Speaking in the Independent, she suggested that "if you want to plan well ahead, then they get you into the habit of putting a bit away every month".
Ms Hannums expressed her support for the Halifax Regular Saver account, which she claimed has "no strings attached" other than a £25-50 monthly deposit.
But the Investment Management Association this week warned that funds should not be placed in products such as individual savings accounts if the money is needed elsewhere.
Communications officer Helen Stephenson said: "Youve got to be able to feed and clothe your kids before you think about savings."
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