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; 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