HBOS, the banking group which owns Halifax and Bank of Scotland, this week stole a march on rivals with a savings account paying 6 per cent before tax after a year.
Philippa Gee, investment director at the adviser Torquil Clark, said: "I applaud them for bringing fresh thinking into the market and positioning themselves so they are financially stable enough to offer such an interest rate while also challenging people to really make the most of an opportunity."
The account, called Halifax Regular Saver, requires users to deposit between £25 and £250 each month by standing order for 12 consecutive months, making a maximum of £3,000. They are guaranteed 6 per cent gross interest, fixed for 12 months. That is worth 4.8 per cent after tax to a basic-rate taxpayer. At maturity, the capital and interest is swept into an instant-access account chosen by the customert, such as Halifax Web Saver, Halifax Premium Savings Direct or Halifax Instant Saver account. If the account is closed early, the interest will be at the Web Saver rate, now 4.30 per cent.
The account is open to new and existing customers aged over 16, but limited to one account per customer a year, to enforce the £250-a-month ceiling.
David Holmes, spokesman for the Bradford-based Yorkshire Building Society, said: "This is a savings war. We reckon they are losing 1.5 per cent on that 6 per cent; it's like running a six-week television ad campaign."
Nick Robinson, head of savings at Halifax, said: "In the short term this is an investment, and every new product has a cost of recruiting customers. But there will be an incentive for people to start saving again."
Yorkshire promptly extended its offset mortgage with a range of fixed-rate offsets moving on to a tracker charging base rate plus 0.75 per cent. This gives a pay rate on offset savings of 5.59 per cent for the five-year fix, equal to 9.32 per cent for higher-rate taxpayers.
Lindsay Sinclair, chief executive of ING Direct, said: "Again consumers will be lured in with short-term headline rates. They should investigate what happens after six months or a year, when they will be transferred to an account paying greatly inferior interest."Reuse content