M&S Bank offers 6% interest on savings

M&S Bank has launched a savings account paying 6 per cent – but to get that rate, you'll have to open a current account with the bank; then you'll be able to save up to £250 a month with the new deal.

"The no-fee M&S current account launched last May with a competitive overdraft tariff and no charges for overseas ATM withdrawals," says Andrew Hagger at the advice site Moneycomms.co.uk. "Paying the maximum £250 per month into the account will earn £78.31 net of 20 per cent tax after a year, and is only bettered by two competitors when compared with interest paid on a £3,000 current account balance."

The highest return comes from Nationwide's FlexDirect at £124.32, but that includes an introductory rate of 5 per cent, which slumps to just 1 per cent after the first 12 months.

TSB Classic Plus, in second position, also looks attractive if you are always in the black, paying 5 per cent on the first £2,000. However, the cost of authorised borrowing and debit card use abroad is among the most expensive, Mr Hagger warns.