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Hot money deals, 05 July 2011

Which? experts round up the best finance deals

Red car

Our money-saving tip this week warns about the false economy of only looking at price when you buy your car insurance

This week we look at alternative loans and how to get the best deal on car insurance, as well as our regular Best Rate round-up.

Savings accounts

  • Instant access: The Post Office’s Online Saver account offers the best instant-access deal at 3.01% (including a 1.36% bonus payable for a year). However, if you are willing to give 90 days notice, consider Aldermore’s 90 Day Notice Account instead as it pays an impressive 3.1% on balances from £1,000.
  • One-year fixed rate: Barnsley BS, FirstSave and Yorkshire BS offer a top 1-year fixed rate  deal at 3.5% on balances of at least £1,000.
  • Three-year fixed rate: krbs’s branch or postal account offers the best 3-year fixed rate at 4.25% from balances of £500. Interest is paid monthly or yearly.
  • Five-year fixed rate: krbs currently tops our 5-year fixed rate table with its five-year fixed branch or postal account paying 5%. The minimum investment is £500 and interest is paid monthly or yearly.

Cash Isas

  • Instant access: AA’s Internet Access Isa offers the best instant-access deal paying 3.35%. However, this account does not allow transfers-in from other providers. If you want to transfer in previous years’ funds, then krbs’s Easy Access Cash Isa is the best option paying 3.01% (including a 2.5% bonus payable for a year).
  • One-year fixed rate: Barnsley BS and Chelsea BS offer a top 1-year fixed rate account at 3.3% on balances of £100 upwards.
  • Three-year fixed rate: Northern Rock’s e-Isa account offers the best 3-year fixed rate at 4.26%. This account is operated via the internet only.
  • Five-year fixed rate: Birmingham Midshires currently leads our 5-year fixed rate table with its five-year postal account paying 4.65%. The minimum investment is £500 and interest is paid monthly or yearly.

Best credit cards for borrowing

A card with a low typical APR can come in useful if you only want to hold one card and not switch too often. Whether it’s to spread the cost of a big purchase, enjoy cover or simply for use in case of emergencies, our Best Rate everyday credit card deals offer great value.

  • Barclaycard Simplicity Visa – 7.9% representative APR. The card comes with the Freedom rewards scheme that allows you to earn cashback on purchases with participating retailers. To apply you need to be 21 or above and earn a minimum salary of £20,000.
  • Capital One Click Mastercard – 9.9% typical APR. This card also offers discounts at a range of retail groups for online purchases. For the first six months, you can get 30% off Zavvi.com, 25% off travelpack.com, 20% off and free delivery with Tedbaker.com, and 50% off Viagogo.co.uk. To apply you need to be 21 or above and earn a minimum salary of £20,000.
  • Co-operative Bank Platinum Fixed-Rate Visa – 9.9% typical APR. To apply you need to be 25 or above and earn a minimum salary of £25,000

Both Capital One and Co-operative Bank both have very good customer scores of 70% and 80% respectively and are Which? Recommended Providers.

Current accounts

  • If you’re always in credit: Santander’s Preferred Current Account offers the best deal, paying 5% on credit balances up to £2,500 for the first 12-months. However, after 12 months the rate drops to just 1%.
  • For running a large overdraft: First Direct’s 1st Account is cheapest for running a £500 authorised overdraft for two weeks each month. Over a year it would cost just £17. This account comes with a £250 interest-free overdraft and a £100 bonus when you switch.
  • Good for customer satisfaction:  If customer satisfaction matters to you, First Direct, Smile, Co-operative Bank and Nationwide all achieved high scores in our customer satisfaction survey. Read our current account reviews for more details.

Unsecured personal loans

One increasingly popular alternative to borrowing from the banks or the high street is peer-to-peer lending – a live marketplace in which consumers lend to each other. For those with high credit ratings, Zopa’s lowest rates currently available are 7.9% APR for a £5,000 loan over 3 years and 8.2% APR for a £10,000 loan over 5 years. In our personal loan tables for the same categories, Sainsbury’s offers a representative rate of 8.1% APR and 6.8% APR respectively. 

Mortgages: moving tracker, term deal

The best mortgage deal for you will depend on your own circumstances. Our unique mortgage finder tool takes account of all fees and charges to help you find a mortgage tailored to your needs.

If you’re moving house and are looking for a tracker deal that will last the term of the mortgage:

  • For a low loan-to-value deal: ING Direct offers a deal that tracks at 1.85% above the base rate for the remaining term of the mortgage (the initial rate is 2.35%). It has an arrangement fee of £750 and a £195 booking fee. It’s available direct from the lender only and on loans of £50,000 or more.

For more details and also to see our full selection of fixed, discount and tracker deals, go to our . 

And finally… this week’s money-saving tip

When buying car insurance, shopping around using several price comparison sites and cashback sites can save you both time and money. Don’t automatically opt for the cheapest quote though without first checking the cover that comes with it. Sometimes a few pounds more on an annual premium can give you a much better deal when it comes to the excess you pay and the cover you get if you need to put in a claim after an accident. For more, see our advice on Buying car insurance and the Car insurance policies we rate highly.

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