Money Insider: Grab some financial best buys off the shelf

 

The big UK supermarkets have been selling financial products since 1997, and keen rates and discounted deals continue to make them a popular choice.

With all the financial products being sold online or by phone, the overheads are low and that translates into good- value savings accounts and loans that frequently appear in the best-buy tables.

With no bank branches to maintain this lean and mean set-up gives the supermarket players a distinct advantage.

The advertising is also slick and well positioned, ensuring that millions of weekly shoppers can't help but notice the promotions staring them in the face as they put their weekly groceries on the conveyor belt. Whether it's credit cards, personal loans, savings, insurance or travel money, the shelves are stacked with top-value deals.

Credit cards offering reward points form a very strong product area built on the huge success of the Clubcard and Nectar loyalty schemes at Tesco and Sainsbury's respectively. It's easy to earn extra rewards for using these store- branded credit cards when purchasing the weekly shop or filling the car. To give you an idea of the popularity of these promotions, Sainsbury's Bank has awarded a staggering 2.3 billion Nectar points to its banking customers in the past 12 months alone.

Unsecured borrowing is another strong suit for the supermarkets, with Tesco Clubcard heading the best buys with the longest interest- free term for card purchases :18 months. Sainsbury's is a top 5 player, too, at 15 months.

Tesco Bank is also in the top 10 for 0 per cent balance-transfer deals at 29 months with a one-off arrangement fee of 2.9 per cent – just two months fewer than Barclaycard, which currently offers the longest deal.

Aside from introductory interest-free cards, Tesco and Sainsbury's both offer credit cards with the lowest standard interest rate: 7.8 per cent APR representative – equal top of the best buys

Supermarket banks are just as competitive in personal loans and have dominated the best-buy lending tables over the last three years.

For loans of £7,500 and £10,000, Sainsbury's Bank charges just 4.6 per cent APR representative and is in second place behind Zopa in the best buys, with its main rival Tesco right behind at 4.9 per cent APR.

The supermarket banks have always excelled at offering simple, no-nonsense products, and savings accounts is another area in which they fare well.

While the top slots in the best-buy league for savings tend to be occupied by the challenger banks and niche financial players, both Tesco and Sainsbury's are never too far off the pace with their pricing and often offer a better return than the main UK banks.

It will be interesting to see what happens when these brands move into more complex financial products.

Tesco Bank was the first to move into a new market when it launched its own range of mortgages in August 2012. It has been aggressive with its pricing and, as we speak, is offering the cheapest three-year fixed mortgage at 3.29 per cent (£195 fee) up to 85 per cent loan to value.

The much-anticipated launch of the Tesco current account may well take place later this year and is a move that will come under close scrutiny from the media and wider banking industry. Hopefully, it will deliver innovation and a badly needed injection of fresh competition.

Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk

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

Arts and Entertainment
Supporting role: at the Supreme Court, Rhodes was accompanied by a famous friend, the actor Benedict Cumberbatch
booksPianist James Rhodes on the extraordinary legal battle to stop the injunction of his memoirs
Arts and Entertainment
Jesuthasan Antonythasan as Dheepan
filmDheepan, film review
Sport
Steven Gerrard scores for Liverpool
sport
News
peopleComedian star of Ed Sullivan Show was mother to Ben Stiller
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

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?