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Halifax savers spoilt for choice

They've got their windfalls - now they can look for a better return on their cash
Millions of Halifax savers who last week collected windfalls worth at least pounds 1,400 each should now be looking around for a better deal for the money which made them eligible for the handouts in the first place.

There is now absolutely no reason windfall-wise to keep your savings with the Halifax - whether you opted to keep or sell the shares - and plenty of benefit in shopping around: competition for savers is getting ever stronger and the ex-society's rates are in many cases significantly below the best.

The Halifax itself raised interest rates on a range of accounts on Monday just as its shares started trading on the stock market, and is promising further increases following Friday's interest (and mortgage) rate rises. And were the ex-society to see big outflows of savings it would probably launch some higher-paying accounts, but as things stand it is banking on savers' inertia.

For example, even after the latest improvement in rates the Halifax's popular Liquid Gold instant access account still pays just 3 per cent on balances of pounds 2,500 and 3.25 per cent on pounds 5,000. As our table of Best Savings Rates on page 16 shows, much higher rates are available on even lower balances on instant access. The new Sainsbury's Bank pays 5.75 per cent on as little as pounds 1, and money can be withdrawn from any Link cashpoint machine for free. C&G now pays 6.25 per cent on as little as pounds 1,000 in its Instant Transfer Account - although money in this account effectively takes two days to become available, as first it needs to be electronically transferred to another of your accounts to be withdrawn.

Higher interest rates are also available from a number of the remaining building societies which also offer the potential of further windfalls. Nationwide's branch-based instant access account, Cashbuilder, pays 3.2 per cent on balances of pounds 500, and 3.5 per cent on pounds 5,000; Portman building society pays 4.7 per cent on pounds 100 upwards.

There are even better deals around on accounts operated by post - Nationwide, for example, is paying 6.4 per cent on as little as pounds 500 in its InvestDirect account, which is a market-leader.

It is the same story on accounts that require savers to give x number of days notice.

If you are in a Halifax notice account and you are looking to switch, it may be possible to withdraw at least some of your money immediately and without penalty. The conditions will vary and should be checked with a Halifax branch. If you have a Halifax Tessa that you want to transfer - again worth considering, given that the ex-society is paying just 5.95 per cent on its variable-rate deal, albeit with a 2.5 per cent maturity bonus - you face a pounds 10 penalty.

Generally speaking savers should probably beware of locking into fixed- rate deals given the rising interest rate environment. However, if you are convinced you want a fixed-rate you are likely to be best off investing now - if anything, the fixed-rate deals on offer are likely to go lower.

Mortgage borrowers are also free now to pay off their loans or switch lenders without any effect on their windfall.

But if you are thinking of remortgaging do look beyond a simple comparison of rates - you may face redemption penalties from the Halifax, plus costs in taking out your new mortgage.

q For a free copy of Moneyfacts, a publication listing all rates, call 01692-500677.