Money Insider: 'Best buy' bonds offer hope for savers building their nest eggs

the inflation figures that were announced this week will have come as no great surprise, but continue to make life a misery for savers, particularly those relying on the interest from their nest egg to supplement their income.

With only a few accounts paying a rate sufficient to keep up with the cost of living, more people are turning to longer-term savings accounts to secure a decent rate of return. Whilst tying your money up for four or five years may not be the best strategy if interest rates start to pick up soon, some savers will worry less about that and focus on maximising their monthly income.

For these people there was good news from the Coventry Building Society this week when it launched two "best buy" fixed-rate bonds. Savers are offered a choice of a three-year term at a rate of 4.20 per cent AER fixed or a five-year option at a table-topping 5 per cent. Both accounts can be opened in branch, online or by phone and, unlike many bonds, come with the option of monthly interest payments.

A couple of other excellent new savings accounts deserve a mention. For those aged 50 or over, Saga has launched a telephone saver and an internet saver, both instant-access accounts paying 2.75 per cent. The rate includes a 1 per cent bonus for the first 12 months, but importantly it offers the flexibility of unlimited penalty-free access to your cash.

Northern Rock grabbed a few headlines with a new branch-based regular saver account paying 5 per cent AER fixed for 12 months. The account is far more flexible than many other regular saver products and allows you to save up to £250 per month, plus it permits penalty and notice-free access to your money if you need it.

Play your cards right

interest rates on credit cards are still edging upwards even though Bank Base Rate remains stuck fast at just 0.5 per cent. So now's probably a good time to check that you've got the best credit cards in your purse or wallet as well as a back-to-basics reminder of some of the pitfalls to avoid.

The UK has seen something of a debt binge during the last 10 years, but the severity of the current economic downturn may be a stark reminder for some of us that a credit card is there to help manage our cash flow as opposed to offering a permanent extension of our overdraft limit.

Used wisely, plastic can be a cost-effective way of giving you some added financial flexibility, but if you're using it to make ends meet and you never clear your balance, you'll be wasting hundreds of pounds in the process.

There's nothing wrong with having more than one credit card, and as different cards have different strengths, it's quite feasible that you'll have at least three cards: one for balance transfers, one for everyday purchases that gives you reward points or cashback and one that's cheapest for using abroad.

How to get the best out of your credit card

* If you use a card to transfer a balance at a promotional rate, don't carry the card with you as you may be tempted to use it to make a purchase in a moment of weakness.

* Never draw cash on your credit card – interest rates are far higher than for purchases, there are no interest-free days, plus you'll pay a fee of around 3 per cent.

* Don't be tempted to use credit card cheques – rates and fees are prohibitive.

* Set up a direct debit for your minimum monthly payment – then you won't have to pay a £12 late-payment fee.

* If you have an unexpected major expense, there's nothing wrong with paying it off over two or three months, that's what credit cards are designed for.

* Paying the minimum on your statement is a mug's game – ideally, pay the statement balance in full, but if not, pay off as much as you can afford.

* If you're carrying a balance on your plastic, try switching to 0 per cent for 16 months with Yorkshire Bank and Clydesdale Bank.

* As an alternative to a 0 per cent balance transfer, you may want to consider a low-rate-for-life deal such as MBNA at 5.9 per cent APR.

* As an alternative to a 0 per cent balance transfer, you could choose a low-rate-for-life deal such as MBNA at 5.9 per cent APR.

Andrew Hagger is a money analyst at Moneynet.co.uk

Life and Style
“What is it like being a girl?” was the question on the lips of one inquisitive Reddit user this week
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
beauty
PROMOTED VIDEO
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
transfers
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Sport
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
film
News
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
News
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Sport
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Sport
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
tv
Sport
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
News
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
people
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
tech
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
tech
Finacial products from our partners
Property search
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

    Solutions Architect - Financial Services, SQL, Stored Procedure

    £55000 - £65000 per annum + BONUS + BENEFITS: Harrington Starr: One of the mos...

    Senior UNIX Engineer (UNIX, Linux, Solaris, IBM MQ Server)

    £62000 per annum: Harrington Starr: Senior UNIX Engineer (UNIX, Linux, Solaris...

    BC2

    £50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

    Programme Support, Coms, Bristol, £300-350p/d

    £300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

    Day In a Page

    A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

    A History of the First World War in 100 Moments

    Peace without magnanimity - the summit in a railway siding that ended the fighting
    Scottish independence: How the Commonwealth Games could swing the vote

    Scottish independence: How the Commonwealth Games could swing the vote

    In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
    Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

    A writer spends a night on the streets

    Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
    Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

    UK's railways are entering a new golden age

    New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
    Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

    Conchita becomes a 'bride' on Paris catwalk

    Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
    Pétanque World Championship in Marseilles hit by

    Pétanque 'world cup' hit by death threats

    This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
    Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

    Why did we stop eating whelks?

    Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
    10 best women's sunglasses

    In the shade: 10 best women's sunglasses

    From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
    Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

    World Cup final: Messi? Mascherano is key for Argentina...

    No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
    Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

    Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

    18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice