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

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Content Writer - Global Financial Services

    £25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

    Recruitment Genius: Web Developer - PHP

    £35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

    Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

    £15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Loan Underwriter

    £18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

    Day In a Page

    A nap a day could save your life - and here's why

    A nap a day could save your life

    A midday nap is 'associated with reduced blood pressure'
    If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

    If men are so obsessed by sex...

    ...why do they clam up when confronted with the grisly realities?
    The comedy titans of Avalon on their attempt to save BBC3

    Jon Thoday and Richard Allen-Turner

    The comedy titans of Avalon on their attempt to save BBC3
    The bathing machine is back... but with a difference

    Rolling in the deep

    The bathing machine is back but with a difference
    Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

    Conservatives plot a motoring revolution

    Draft report reveals biggest reform to regulations since driving test introduced in 1935
    The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

    The Silk Roads that trace civilisation

    Long before the West rose to power, Asian pathways were connecting peoples and places
    House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

    The honours that shame Britain

    Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
    When it comes to street harassment, we need to talk about race

    'When it comes to street harassment, we need to talk about race'

    Why are black men living the stereotypes and why are we letting them get away with it?
    International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

    International Tap Festival comes to the UK

    Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
    War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

    Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

    Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
    Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

    'A subversive brothel keeper and Communist'

    Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
    Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

    BBC heads to the Californian coast

    The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
    Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

    Victorian fraudster who shook the Bank of England

    Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
    Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

    Car hacking scandal

    Security designed to stop thieves hot-wiring almost every modern motor has been cracked
    10 best placemats

    Take your seat: 10 best placemats

    Protect your table and dine in style with a bold new accessory