Banks bid online for your cashService aimed at savers with more than £30,000
05 February 2009
A new "cash auction" website is seeking to match savers with willing banks in a bid to get better rates for investors.
If you've used up your cash Isa allowance and have savings left over, MaxBips.com says it will help investors with £30,000 or more to find the best interest rates for their money.
Only banks covered by the Financial Services Compensation Scheme are allowed to subscribe to the service though overseas institutions that are authorised by the FSA to operate in the UK (like ICICI Bank) may also bid for deposits.
How it operates
MaxBips.com will carry out no-obligation online auctions into which savers enter lump sum "lots" of over £30,000.
They also have to specify for how long they want to invest the cash, which means the money doesn't have to be "locked in" for longer than the investor might want.
This period can be from 30 days to 2 years in duration.
At the end of the auction, savers have 30 minutes to decide which if any of the offers they want to take up, with their details being passed to the "winning" bank.
May not be the best rate
The site works by connecting savers with banks' treasury desks, which are able to offer rates which might not be available publicly.
Although some savers will get better deals by this route than they could elsewhere (especially given the current level of interest rates) others might find there are better rates on the high street if they do their research.
This is especially applicable if they can afford to tie-up their money for a reasonable length of time, so check out our cash account best buys first.
It describes itself as an "introducer" and charges an annual fee of £49 per year for its services.
MaxBips.com says anyone can call treasury desks to try and secure a more competitive rate for their savings but it can save consumers the effort of having to ring around.
It's worth bearing in mind before you invest that the compensation limit for retail deposits is only £50,000.
This means that although you may get better rates the more you can invest, you have to weigh this up against what you could lose out on if your investment partner goes bust.
The best policy is not to invest more than the compensation limit in any one institution.
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