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; request a free guide on NISAs from Hargreaves Lansdown

News
people
News
people
News
peopleStella McCartney apologises over controversial Instagram picture
Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
PROMOTED VIDEO
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsA Welsh town has changed its name - and a prize if you can notice how
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
peopleAt the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
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

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Italian couples fake UK divorce scam on an ‘industrial scale’

    Welcome to Maidenhead, the divorce capital of... Italy

    A look at the the legal tourists who exploited our liberal dissolution rules
    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    The vintage series has often been criticised for racial stereotyping
    An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

    An app for the amorous

    Could Good2Go end disputes about sexual consent - without being a passion-killer?
    Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

    Llansanffraid is now Llansantffraid

    Welsh town changes its name, but can you spot the difference?
    Charlotte Riley: At the peak of her powers

    Charlotte Riley: At the peak of her powers

    After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
    She's having a laugh: Britain's female comedians have never had it so good

    She's having a laugh

    Britain's female comedians have never had it so good, says stand-up Natalie Haynes
    Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

    Let there be light

    Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
    Great British Bake Off, semi-final, review: Richard remains the baker to beat

    Tensions rise in Bake Off's pastry week

    Richard remains the baker to beat as Chetna begins to flake
    Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

    A look to the future

    It's time travel fashion at Louis Vuitton in Paris
    The 10 best bedspreads

    The 10 best bedspreads

    Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
    Arsenal vs Galatasaray: Five things we learnt from the Emirates

    Arsenal vs Galatasaray

    Five things we learnt from the Gunners' Champions League victory at the Emirates
    Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

    Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

    This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?