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Savings deals of the week, 19 September 2013

Which? experts round up the best savings deals

Which? Money provides its weekly look at the best savings deals currently available to help you deposit your cash in the right account. 

Best savings accounts on the market

UK inflation has fallen slightly (from 2.80% to 2.70%), but it provides little respite for struggling savers as rates remain woefully low.

To match the rate of inflation, a basic-rate taxpayer would need a savings account paying 3.38% a year and a higher-rate taxpayer would need one paying 4.50%.

Unfortunately, of the 804 savings accounts and cash Isas on the market, only one is able to beat inflation for basic-rate taxpayers. This is the seven-year fixed rate bond from Skipton Building Society, which pays 3.50%. But in such a volatile market, you should think carefully before tying your money up for so long.

With savings rates so poor, it’s essential you keep track of the interest rate you’re getting and switch to a more competitive account if necessary. 

Most attractive cash Isas

To maximise the interest you’re getting, use up your tax-free cash Isa allowance first, before putting your money in a taxable account. The cash Isa allowance for the current year is £5,760.

Nationwide’s Easy Saver Isa and Tesco Bank’s Instant Access Cash Isa offer the best instant-access cash Isa rate at 2.00%, but both accounts don’t allow transfers in from other providers. If you want to transfer previous years’ allowances, then Virgin Money’s Easy Access Cash Isa and Cash eIsa is the best option, at 1.75%.

If you’ve already used up your cash Isa allowance this year, the best ordinary instant access savings account, pays 1.50% – 1.20% after basic-rate tax at 20%.

Find more Best Rate products

  • Best Rate savings accounts – to find the best instant access, notice or fixed-rate savings accounts.
  • Best Rate cash Isas – to find the best tax-free instant access, notice or fixed-rate cash Isa deals.
  • Best Rate credit cards to find the best cards to suit your requirements.
  • Top unsecured personal loans – for borrowing £5,000 over 3-years or £10,000 over 5-years.

And finally… boost your savings

To find out if your savings account is paying a competitive interest rate, check out the Which? Savings Rate Booster tool and switch your account for a better deal if necessary.

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