TSB cuts Tessa rates

INTEREST rates on TSB's Tessa savings plan have been cut from to 7.25 to 6.75 per cent. This does not affect its loyalty bonus whereby, when the account matures after five years, savers get an extra 5 per cent on top of the interest already accrued. This brings the total rate over that period to 7.05 per cent.

Cheshire Building Society's new Tessa is guaranteed to stay at 0.75 per cent below its mortgage interest rates. At present the interest paid is 7 per cent.

Over two years an income bond from General Portfolio will pay 5.62 per cent free of tax at the standard rate on savings above pounds 50,000. The rate drops to 5.32 per cent for between pounds 10,000 and pounds 20,000.

----------------------------------------------------------------- SIX OF THE BEST ----------------------------------------------------------------- Savings ----------------------------------------------------------------- Type Account Term *0% *25% *40% Min pounds GIB Chase de Vere 5 years 7.25 7.25 6.16 10,000 B Soc Leeds & Holbeck Instant 6.80 5.10 4.08 50,000 Tessa Hinckley & Rugby 5 years 7.35 7.36 7.36 3,000 ----------------------------------------------------------------- *Compounded annual rate except for GIB (guaranteed income bond) ----------------------------------------------------------------- Source: Chase De Vere 071-404 5766 ----------------------------------------------------------------- Mortgages ----------------------------------------------------------------- Type Source Deal Variable Northern Rock* 2.99% discounted rate on 90% loans. Fixed First Mortgage Securities 7.85% for 5 yrs on 75% loans pounds 275 fee Capped Royal Bank of Scotland 8.99% for 5 yrs on 95% loans ----------------------------------------------------------------- *Arrangement fee of pounds 150. Household insurance through Northern Rock. ----------------------------------------------------------------- Source: John Charcol 071-611 7000 -----------------------------------------------------------------