Money: We're going to lose interest in saving our cash

The search for the best savings deal is starting to resemble the hunt for El Dorado. There may be treasure out there somewhere - but it certainly isn't in Halifax Gold.

The bank has cut interest rates on its Gold range of accounts by up to 0.25 per cent. A saver with pounds 5,000 in the Solid Gold 30-day notice account now gets just 2.7 per cent gross interest on that cash. After 20 per cent tax, the returns are only fractionally ahead of inflation. The cuts make a mockery of the Halifax's statement after last month's 0.25 per cent interest-rate reduction that it was "more mindful" of rates for savers and so only passed on a 0.1 per cent cut in its standard borrowing rate.

The margin between the interest paid on our savings and the income from mortgage interest generates more than 70 per cent of the income at banks which used to be building societies, according to the latest banking report from Salomon Smith Barney. The most mortgage-dependent banks are Northern Rock, Halifax, Abbey National and Woolwich. (The Alliance & Leicester is less dependent as it has the Girobank business.) These banks need to cut your savings rates in order to keep their income steady (or rising).

The best savings rate outside an individual savings account (ISA) - at 6 per cent gross for pounds 1 upwards - is from Egg but it is now available only through the internet (www.egg.com) and no longer on the phone as well. The move is designed to slow down the opening of new accounts. You can see how much of a loss-leader this rate is by comparing it with Egg's mortgage rate - 5.99 per cent.

The new tax-free ISA accounts are a better deal, with the Norwich & Peterborough Building Society's instant access account topping the tables at 6.75 per cent interest (0800 883322). The snag with this account, and with several of the other decent ISA deals, is that you have to put the maximum pounds 3,000 into the account to get that rate.

The only one of the top ISAs to allow you to invest pounds 1 upwards is the Nationwide BS, paying 6.5 per cent (0500 302010). And new Nationwide members have to sign away any future windfalls - that rule doesn't apply at the N&P.

So much for the ISA account being the Government's dream ticket to encourage saving among the less well-off. The best savings rates in the UK are only on offer to the affluent, computer-owning classes or those who have a spare pounds 3,000 to invest.

n i.berwick@independent.co.uk