Money Insider: Don't discount banks in the January sales

While we don't know what's in store for us in 2010 in terms of interest rates, house prices and inflation, one dead cert was that financial institutions would queue up to offer us a piece of the new year sales action.

As with the January discounts you find in shops, you should treat those on offer from the banks in the same manner. You need to ask yourself a few questions before making a hasty purchase that you may later regret. For example, do you really need it; is it the right fit for you; and, of course, could you find a cheaper or more suitable option?

HSBC this week launched its sixth annual "sale" offering improved rates or terms across a wide range of banking products.

The 2.29 per cent discounted two-year mortgage looks a real winner and worth considering, but most of the other sale items are not quite such bargains as they appear.

The three- and five-year fixed-rate savings accounts have had the rate enhanced by 0.75 per cent and are both offering 4.25 per cent, but only if you open a Plus or Premier current account, both of which come with monthly fees. The other issue with these savings rates is that even though they've been increased, you can still get a better return with three-year fixed rates of 4.7 per cent from ICICI Bank and 4.5 per cent from Halifax. Similarly, fixing your savings for five years can see you earn as much as 5.25 per cent from State Bank of India or 5.15 per cent from Aldermore, both of which have the full Financial Services Compensation Scheme £50,000 guarantee.

The problem with sales is that people often make snap purchases as the window of opportunity seems quite short. However, when it comes to making financial decisions, it pays to take your time and not be swayed purely by the price on the ticket.

As with any sale, while some on offer are good, others that look appealing at first glance may end up being a disappointment.

Mortgages

The first week of 2010 has seen further positive news on the house-price front plus a handful of cracking new mortgage deals on offer from the building societies.

The Halifax house-price index reported its sixth consecutive monthly increase, with the average property now said to be worth a shade over £169,000, an improvement of 9.4 per cent on the 2009 low point we saw last April.

With the economic uncertainty and future supply of houses for sale making price predictions difficult, providers are certainly doing their bit to stimulate the market in an effort to keep the momentum going.

The two-year fixed-rate market has been the focus of lender activity this week with Cumberland Building Society trimming an already market-leading rate to 3.49 per cent with a fee of £995 for loans to 60 per cent loan-to-value.

Mansfield Building Society also revealed a strong appetite for new business with a two-year fix at 3.59 per cent and £999 fee available up to a more generous 75 per cent loan-to-value. The third in a trio of new deals from the mutual sector came courtesy of Coventry Building Society, at 3.75 per cent fixed for two years to 70 per cent loan-to-value with a fee of £800.

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

Just 50 weeks to go now till Christmas...

THere's not been quite so much to cheer about in the savings market this week, with some fixed-rate bonds being pulled and others seeing rates reduced. The best deal on a one-year bond now stands at just 3.65 per cent with FirstSave, whereas a couple of months back, rates as high as 3.95 per cent were on offer.

It's not all bad news, though, with an innovative and flexible savings product launched by Yorkshire Building Society, aimed at saving for Christmas 2010. While Christmas may be the last thing on your mind at the moment, putting money aside throughout the year is a better option than relying on expensive credit card borrowing.

The account pays an excellent fixed rate of 3.5 per cent gross/AER and allows you to save up to a maximum of £1,200, either as a one-off payment, regular payments or in dribs and drabs throughout the year. You can't gain access to the money until 1 December 2010, which is not a bad thing, and you are able to fund the account by standing order, cash or cheque.

Coventry Building Society has just launched the latest version of its popular 1st Class Postal account, offering a variable rate of 3.3 per cent gross/AER. The postal-operated account offers a decent rate, including a 1.3 per cent AER bonus for the first 12 months plus the flexibility of four penalty-free withdrawals each year.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
PROMOTED VIDEO
News
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
News
i100(and it's got nothing to do with the Great British Bake Off)
News
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
News
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
News
news It's not just the world that's a mess at the moment...
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
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

    Data Scientist (SQL,Data mining, data modelling, PHD, AI)

    £50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

    SAS Business Analyst - Credit Risk - Retail Banking

    £450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

    Project Manager - Pensions

    £32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

    KYC Analyst, Birmingham - £200-£250 p/d

    £200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

    Day In a Page

    Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

    The phoney war is over

    Russian troops and armour pour into Ukraine
    Potatoes could be off the menu as crop pests threaten UK

    Potatoes could be off the menu as crop pests threaten UK

    The world’s entire food system is under attack - and Britain is most at risk, according to a new study
    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
    From Mozart to Orson Welles: Creative geniuses who peaked too soon

    Creative geniuses who peaked too soon

    After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
    Caught in the crossfire of a cyber Cold War

    Caught in the crossfire of a cyber Cold War

    Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

    Salomé: A head for seduction

    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
    From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

    British Library celebrates all things Gothic

    Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
    The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

    Is the Hard Rock Café worth fighting for?

    The restaurant chain's owners are currently embroiled in a bitter legal dispute
    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

    In search of Caribbean soul food

    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
    11 best face powders

    11 best face powders

    Sweep away shiny skin with our pick of the best pressed and loose powder bases
    England vs Norway: Roy Hodgson's hands tied by exploding top flight

    Roy Hodgson's hands tied by exploding top flight

    Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
    Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

    Di Maria and Ronaldo: A tale of two Manchester United No 7s

    They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone