Resist being tied down

With savings rates still leapfrogging each other, it does not make sense to tie yourself into long-term deals, no matter how attractive they appear.

So, unless you have a desperate compulsion to lock your money away, it does not pay to go for many of the two- and three-year deals now available.

One possible exception might be if you need no-risk income. If so, Bradford & Bingley has launched a competitively priced fixed-rate savings bond, maturing in March 1999. The bond, which has a minimum investment of pounds 1,000, pays 7 per cent gross if you take income annually or 6.75 if income is paid monthly.

Alternatively, you may want to keep your cash in a high-interest 90-day notice postal account. Birmingham Midshires will pay 6.55 per cent gross on savings above pounds 10,000, rising to 7.1 per cent on deposits above pounds 250,000. The rates are variable, however. Check regularly, and prepare to bail out if they go back down.