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Hot money deals, 10 August 2011

Which? experts round up the best finance deals

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Cut the cost of cover abroad with our travel insurance tips

This week our experts take a look at the full range of savings accounts and cash Isas, and hunt out the best credit card deals offering cashback We also examine this week’s best rate loans and mortgage deals.

This week’s best savings accounts

  • Instant access savings: Derbyshire BS offers the best instant-access deal at 3.11% (including a 2.11% bonus payable to 30 November 2012). However, you will need to review this account once the bonus period ends as the rate drops to just 1%.
  • One-year fixed rate savings: Aldermore offers a top-paying 1-year fixed rate account at 3.52% on balances of at least £1,000.
  • Two-year fixed rate savings: Bank of Ireland UK offers the top 2-year fixed rate deal at 4%. This is closely followed by the Post Office’s Online Bond paying 3.96%.
  • Three-year fixed rate savings: Post Office’s Online Bond offers the best 3-year fixed rate at 4.21% on balances of at least £500. Interest is paid monthly or yearly.
  • Four-year fixed rate savings: Aldermore offers the best 4-year fixed rate account at 4.25%. This account can be operated by internet, post or telephone.
  • Five-year fixed rate savings: Saga offers the top-paying 5-year fixed rate accounts paying 4.65%. Saga savings accounts are available to those aged 50 and over.

The market’s best cash Isas

  • Instant access cash Isa: Santander’s Flexible Isa Issue 3 offers the best instant-access deal paying 3.3%. However, this account does not allow transfers-in from other providers. If you want to transfer in previous years’ funds, then Northern Rock’s e-Isa is the best option paying 2.80%
  • One-year fixed rate cash Isa: UPDATED Metro Bank offers the top 1-year fixed rate account at 3.25% on balances of £1 upwards.You can operate this account at a branch, by post or telephone
  • Two-year fixed rate cash Isa: The Post Office  tops the 2-year fixed rate table with their branch-based or postal account paying 3.75%.
  • Three-year fixed rate cash Isa: Northern Rock offers the best 3-year fixed rate account paying 4.01% on balances of at least £500.
  • Four-year fixed rate cash Isa: Halifax are top with their 4-year fixed rate at 4.3%. The account can be operated at a branch, online, by post or by telephone.
  • Five-year fixed rate cash Isa: 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 cashback

There are currently several good cashback deals on the market from American Express, Capital One and MBNA:

  • The Platinum Cashback Card from Which? Recommended Provider American Express is great if you’re planning to spend a lot on it in the first three months. It pays 5% cashback for the first 3 months (max £100), followed by 0.5% on an annual spend of up to £3,500, 1% on amounts between £3,501 and £7,500 and 1.25% on amounts above £7,501. You have to spend more than £3,000 a year to earn any cashback. Pay your bill off every month as the card has an APR of 19.9%.
  • The World MasterCard from Which? Recommended Provider Capital One offers a similar deal to American Express. This includes the 5% cashback for the the first 3 months (max £100), followed by 0.5% on an annual spend of up to £5,999, 1% on amounts between £6,000 and £9,999 and 1.25% on amounts above £10,000. Like the American Express card make sure you pay your bill off every month as the card has an above average APR of 19.9%.
  • MBNA also offers a very good American Express credit card with cashback. This card has a generous 1.5% cashback on spending at major supermarkets and petrol stations and 0.75% on all other purchases. A Visa card option is also available which offers a reduced 1.25% cashback level at major supermarkets and 0.5% on all other purchases. Both cards come with a relatively high 18.9% APR.
Comparison of cashback earned on £500 and £1000 spend over the first year
Card name APR Cashback earned on £500 monthly spend Cashback earned on £1000 monthly spend Customer score
American Express Platinum Cashback Card 19.9% £103 £173 69%
Capital One World MasterCard 19.9% £98 £160 70%
MBNA Amex Credit Card with Cashback 18.9% £90 £180 51%
  • Check our Cashback credit card table for daily updates.

The cheapest unsecured personal loans

In our Best Rate tables we show the lowest rates available for loans that aren’t exclusive to specific account holders or existing members of banks or institutions. The average representative rate for a £5k loan over a 3 year term is presently 12.59% APR. The average for a £10k over 5 year loan is 8.79% APR.        

  • For those borrowing £5,000 over three years: Sainsbury’s offers a top representative rate of 8.1% APR for a £5,000 loan. Alternatively, at 8.6% – still highly competitive – borrowers can instead opt for two years of doubled Nectar points and a £25 gift card.
  • For those borrowing £10,000 over five years: M&S Money and Sainsbury’s are at the top of our best rate tables with a rate of 6.70%. The only lender that can beat this deal is Nationwide Building Society, which offers a deal of 6.50%, but to existing customers only.

Today’s top mortgage deals

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 remortgaging and looking for a two year discount deal, our best rates this week are:

  • High loan-to-value: Mansfield BS offers a 4.59% deal, which is a discount of 1% during the two-year period. It’s a good rate but reverts to 5.59% when the two years are up.
  • Low loan-to-value: Market Harborough BS provides a discounted rate of 2.75% – a great deal while it applies (after which it reverts to 5.49%).

For more details and also to see our full selection of fixed, discount and tracker deals, check out our mortgage Best Rate tables. 

And finally… this week’s money-saving tip

When choosing your travel insurance policy it’s worth considering the following tips before you buy:

  • Shop for travel insurance online to save you money
  • Tell your insurer if you or anyone you’re travelling with has any pre-existing medical conditions, otherwise you might not be covered
  • Buy an annual policy if you take more than two or three trips a year
  • Buy your policy directly from an insurer rather than a travel agent as it’s generally cheaper
  • Read the small print before you take out the policy to ensure it meets your requirements

For details of Best Buys for different age groups and destinations, read our Travel insurance review.

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