Vicky Burn, deputy editor of MoneyFacts, a financial data magazine, says the big bank Goliaths were beaten hands down by the tiny building society Davids in its annual round-up of Tessa payout values.
The lucky saver who put pounds 9,000 into the top-performing Tessa from the Chorley & District building society in January 1993 would have reaped pounds 618 more than in the poorest one provided by Cater Allen Bank.
The magazine's performance chart shows that for Tessas taken out five years ago only one of the high street lenders comes in the top 20. This was with TSB. Halifax is the next big player but is well down the list at 25.
The rest of the nation's big hitters languish near the bottom end. Of the 92 Tessas monitored, NatWest came in at 73, Lloyds at 74, Midland and First Direct at 75 and 76, while Barclays' offerings were at 59 and 86.
Eight of the top 10 providers to January 1998 are building societies that have retained their mutual status. National Counties, at number 10, has just one branch.
Of the other top performers, Buckinghamshire, Tipton & Coseley and Holmesdale building societies, at five, six and eight respectively, are so tiny that they refuse to accept savers from outside their localities.
The largest mutuals, however, have failed to keep up with their smaller brethren. Bradford & Bingley's "High Return" product came 47th, Britannia BS was 57th and Nationwide came 62nd. The Consumers' Association says building societies were ahead of the banks in general because the banks need to make bigger margins to satisfy shareholders. Mick McAteer, senior policy researcher at the association, says 40 per cent of the banks' post- tax profits were paid in dividends. Stephen Bullock, the chief executive of Chorley & District building society, says: "The absence of shareholders has meant that building societies could improve rates by 0.4 per cent over their plc counterparts."
Mr McAteer says that the larger societies, which offer poorer value on the Tessa side, have keener rates on mortgages in general. Mr Bullock believes smaller societies can pay better rates because they are more specialist. Big societies such as Bradford & Bingley have diversified into a broader range of products.
Mark Hamilton, of the Nationwide, agrees with this. He says: "Tessas are the smaller societies' flagship products."
q Contacts: Cheshire BS, 0800 243278; Chorley & District BS, 01257 279373; Coventry BS, 0345 665522; Halifax, 0345 263646; Investec, 0171 283 9111; 'MoneyFacts', 01692 500765; National Counties BS, 01372 747771: Norwich & Peterborough BS, 01733 372222; Skipton BS, 0345 171777; Yorkshire BS, 0800 378836.
q Dido Sandler writes for 'Financial Adviser'.
Top 20 performing variable rate Tessas (assuming investment of the pounds 9,000 maximum over five years)
Institution Payout value
Chorley & District BS pounds 11,602
Julian Hodge Bank pounds 11,600
Investec Bank (UK) pounds 11,593
Norwich & Peterborough BS pounds 11,576
Buckinghamshire BS pounds 11,565
Tipton & Coseley BS pounds 11,564
Cheshire BS pounds 11,564
Holmesdale BS pounds 11,559
Dunfermline BS pounds 11,547
National Counties BS pounds 11,534
Hinkley & Rugby BS pounds 11,531
Dudley BS pounds 11,525
TSB pounds 11,509
Loughborough BS pounds 11,505
Cambridge BS pounds 11,501
Melton Mowbray BS pounds 11,496
Monmouthshire BS pounds 11,493
Principality BS pounds 11,493
Earl Shilton BS pounds 11,477
Kent Reliance BS pounds 11,475