Money Insider: Spring clean for savings is a new fixed-rate bond

Now that the worst of the long cold winter is seemingly behind us, hopefully we can start to look forward to some brighter and better spring weather.

It's pretty much a similar situation for savers, for whom it's been a story of doom and gloom as far as interest rates go, with little or nothing to smile about. However in the past few weeks there have been some early signs that this situation is slowly starting to improve, with some promising new shoots popping their heads up in the fixed rate bond market.

The new one-year bond from AA savings at 3.4 per cent AER is a cracking deal, some 0.15 per cent ahead of its nearest rival and the best one-year rate I've seen since February 2010. The bond can be opened online and after the initial application can be managed by post, but this shouldn't present any problems. The account can be opened from just £1, however with such an exceptional rate, I don't expect it will be around for very long.

It's not just the one-year term where I've seen an uplift in interest rates: on Wednesday, Close Savings, part of Close Brothers plc, launched two new fixed-term deposits as part of its Premium Gold' series. Again, the rates are extremely impressive with the 18-month option paying 4 per cent AER and a three-year bond at a staggering 5 per cent.

The latter is actually higher than you can get on a five-year bond at the moment and is 0.85 per cent higher than the next best three-year offering of 4.15 per cent from Coventry Building Society.

The Close Savings bonds have a minimum balance requirement of £10,000 and are a limited issue, so again you'll need to be quick out of the blocks to secure a best buy rate.

Further details can be found by visiting www.closesavings.co.ukor calling 020 7392 1772.

So if the first week of March is your trigger to start a bit of spring cleaning in the home or garden, this year it looks as if it's also the perfect time to blow the dust off of your old savings accounts and give your interest income a kick start too.Andrew Hagger is an analyst at Moneynet.co.uk

Protect your interest in ISA switch

it's a tough call for consumers looking for a best-buy ISA whether to opt for a variable rate or a fixed-rate account this year. The best one-year fixed rate ISA from Barnsley Building Society pays 3.2 per cent, compared with the 3.15 per cent variable deal from Santander, although the latter doesn't permit you to transfer in previous ISA funds.

Halifax is paying 3 per cent and allows transfers in, so with many experts predicting an increase in base rate over the next 12 months, the variable rate may turn out to be the more rewarding option this year. If you prefer a fixed-rate ISA and perhaps longer than one year, you may be interested in the three- year fix from Aldermore at 4.01 per cent or a four-year option from Principality BS at 4.3 per cent.

It's also vital to check the rate you're receiving on tax-free savings accumulated from previous years. Halifax, Lloyds TSB and Nationwide BS have all pledged that customers wishing to transfer an ISA to them from another bank or building society will receive interest from the day they submit their signed application form.

Hopefully this will encourage more people to switch savings in search of a better rate – it's just a shame other banks and building societies haven't followed this lead.

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

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