Money Insider: Investec doubles up with rates that track best buys

 

It's been a hectic week on the savings front, with much of the activity in the ISA sector. However, away from the jostling in the tax-free best buy tables, there was an eye-catching return to the savings arena from Investec Bank.

The bank launched two new versions of its popular High 5 account, albeit this time one of them is now labelled the High 10.

These accounts are unique in that the rates are independently assessed and adjusted on a weekly basis, judged against the best savings rates in the market, with the High 5 looking at the top five best buys and the High 10, the top ten best buys across a range of savings types.

Whilst the minimum balance will be out of reach of many savers at £25,000, the beauty of these accounts is that you are guaranteed an excellent rate compared with the market, and even though some of the competition will have a short-term introductory bonus, this won't affect the rate on the High 5 or High 10. As a result you won't need to worry about chasing rates or having to switch to a new deal every six or 12 months.

The High 5 account (issue 2) is currently paying 3.17 per cent and you need to give six months' notice for withdrawal. The High 10 is paying slightly less at 3.11 per cent but requires only half the notice period at just three months. Both accounts have a maximum balance limit of £100,000.

When you consider that most fixed-rate bonds with a six-month term are paying less than 2 per cent, these accounts offer good value; in fact I could find only one such bond with a higher return than the Investec accounts, which is from FirstSave, paying 3.28 per cent on a minimum balance of £5,000.

Despite no movement in the base rate for three years now, it's good news that we're seeing signs of increased competition in the savings market, helping to maintain rates at a much higher level than at this time last year.

High-paying junior ISA has strings attached

The end of the tax year is fast approaching and in just 48 days the 2012-13 tax year kicks off.

From what I've seen over the past couple of weeks the banks and building societies are already working flat out to ensure they grab a decent share of the action.

It's headline rates that tend to catch people's attention, so you can imagine there were plenty of eyebrows raised this week when Halifax said it would pay 6 per cent on a Junior ISA – double the rate that most accounts currently offer. A rate so out of kilter with the rest of the market usually comes with some strings attached, and the Halifax offer is no exception.

To qualify for the enhanced Junior ISA rate, one of the child's parents must also hold an ISA product with Halifax.

If you compare the Halifax ISA Saver Online, which pays 2.6 per cent, against the current market leader from Nationwide Building Society at 3.1 per cent, and invest £5,340 for 12 months, you'll be £26.70 worse off with the Halifax. However, in this instance you need to consider the combined result of holding both an adult account and the Junior ISA, as someone with the Nationwide best buy would be able to earn a maximum of only3 per cent on the junior account.

If you open the Halifax Junior ISA at 6 per cent and fund it with at least £900, the net effect is that you'll recoup the £27 you're losing on the adult ISA deal.

So if you're using the full adult ISA allowance in an easy access account, the Halifax Junior ISA is really only worth considering if you're investing £900 or more.

However there are some very competitive longer-term fixed-rate ISAs from Halifax, particularly the four-year option at 4.1 per cent and the five year rate at 4.2 per cent.

If you're only in the market for an adult ISA and want the flexibility of instant penalty-free access, the Online ISA (issue 3) from Nationwide currently tops the best buys at 3.1 per cent. There is a minimum balance requirement of £1,000.

Andrew Hagger, Moneynet.co.uk

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

News
Alan Bennett has criticised the “repellent” reality shows which dominate our screens
tvBut he does like Stewart Lee
Life and Style
The Google Doodle celebrating the start of the first day of autumn, 2014.
tech
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Sport
David Moyes and Louis van Gaal
football
PROMOTED VIDEO
News
i100
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
News
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Life and Style
food + drink
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
News
A cabin crew member photographed the devastation after one flight
news
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
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 / Experienced Recruitment Consultants

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

    Trainee Recruitment Consultant - Soho

    £20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Quantitative Risk Manager

    Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

    Day In a Page

    Secret politics of the weekly shop

    The politics of the weekly shop

    New app reveals political leanings of food companies
    Beam me up, Scottie!

    Beam me up, Scottie!

    Celebrity Trekkies from Alex Salmond to Barack Obama
    Beware Wet Paint: The ICA's latest ambitious exhibition

    Beware Wet Paint

    The ICA's latest ambitious exhibition
    Pink Floyd have produced some of rock's greatest ever album covers

    Pink Floyd have produced some of rock's greatest ever album covers

    Can 'The Endless River' carry on the tradition?
    Sanctuary for the suicidal

    Sanctuary for the suicidal

    One mother's story of how London charity Maytree helped her son with his depression
    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits