A charmed two years for Lloyds savers

Lloyds TSB has fired another shot in the battle of the high-street banks with last week's launch of a regular savings account paying 8 per cent interest for two years.

Although the bank is a late entrant to the market for high-interest regular monthly savings accounts, it has won plaudits for the length of the offer.

"The headline rate of 8 per cent - while not market leading - is unquestionably very appealing, especially when combined with the fact that it is available for two years instead of the usual one," says Stuart Glendinning of the price-comparison service Moneysupermarket.com.

Although the bank has dubbed the offer a "no strings" account, there are in fact a number of restrictions to watch out for.

You can pay in up to £750 at the outset, but from then on your monthly contributions are limited to between £25 and £250.

And although, unusually for a regular-saver deal, you can get your hands on your money whenever you want, any withdrawals or missed monthly payments cannot be replaced.

Further, you need to hold your current account with Lloyds TSB - although unlike some financial institutions, it offers its regular saver to both new and existing customers.

Interest is paid once a year - on the anniversary of the account being opened - and a customer making the maximum contributions over two years can save £6,500 and earn £594.68 interest, claims Lloyds TSB.

Sue Hannums at Chase de Vere, an independent financial adviser, says savers can open a current account at Lloyds TSB with just £1 - and then take advantage of the 8 per cent regular saver.

"For a basic-rate tax- payer, this beats the rate paid on some [cash] individual savings accounts [ISAs]," she adds.

But Ms Hannums reminds savers that interest isn't paid on the whole lump sum put in over the year, but calculated pro rata as the money is paid in.

This means that while the first month's deposit earns 8 per cent for a year, the second month's deposit will earn this rate for 11 months, and so on.

Although Barclays and Alliance & Leicester pay 10 per cent for one year on regular-saver accounts, many savings specialists prefer the Halifax deal paying 7 per cent on regular contributions of between £25 and £250 a month for a year.

"The advantage of [the Halifax] account is that it is not restricted to current account customers but open to everyone," adds Mr Glendinning.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
Sport
wimbledonScot will face Ivo Karlovic next
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    Day In a Page

    Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

    Is this the future of flying?

    Battery-powered planes made of plastic, and without flight decks
    Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

    Isis are barbarians

    but the Caliphate is an ancient Muslim ideal
    The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

    Curse of Brink's Mat strikes again

    Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
    Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

    'The ministers talk to us about miracles'

    Why Greeks are cynical ahead of the bailout referendum
    Call of the wild: How science is learning to decode the way animals communicate

    Call of the wild

    How science is learning to decode the way animals communicate
    Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

    'The economic collapse has happened. What is at risk now is democracy...'

    If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
    The science of swearing: What lies behind the use of four-letter words?

    The science of swearing

    What lies behind the use of four-letter words?
    The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

    The Real Stories of Migrant Britain

    Clive fled from Zimbabwe - now it won’t have him back
    Africa on the menu: Three foodie friends want to popularise dishes from the continent

    Africa on the menu

    Three foodie friends want to popularise dishes from the hot new continent
    Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

    Who will fill Donna Karan's boots?

    The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
    10 best statement lightbulbs

    10 best statement lightbulbs

    Dare to bare with some out-of-the-ordinary illumination
    Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

    Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

    Briton pumped up for dream meeting with world No 1
    Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

    Nick Bollettieri's Wimbledon Files

    It's time for big John Isner to produce the goods to go with his thumping serve
    Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

    Dustin Brown

    Who is the German player that knocked Nadal out of Wimbeldon 2015?
    Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

    Damien Martyn: 'England are fired up again, just like in 2005...'

    Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test