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Safest Saving Accounts in the UK

A majority of savers can feel rest assured about the safety of their savings. This is because of the UK Financial Services Compensation Scheme which guarantees the first GBP50000 per person at UK authorized banks. However if you have more than GBP50000 in any given account with a particular bank the excess amount is out of the purview of the guarantee. You can overcome this problem by spreading your money by depositing it with the accounts of different banks.

The following is a guide to top accounts you can use to maximize your interest rate and safety. These accounts all have their own compensation allowance from the regulator.

High-street banking

Bradford & Bingley Good for Life pays 4.2% on minimum GBP1000. It guarantees to pay at least base rate currently 5% plus 0.25 percentage points for the life of the account. Bradford & Bingley savings accounts are now part of Abbey owned by Spanish bank Santander so you have one lot of GBP50000 compensation on all money held with Bradford & Bingley Abbey Cahoots and Asda.

Post Office Instant Saver pays 4.6% on GBP500 or more. But be ready to move after 12 months when the rate will drop as the one percentage point bonus becomes exhausted. The rate excluding the bonus is 3.4% and you are limited to six free withdrawals a year. You can run it through 12400 post office branches. These have an unlimited level of compensation from the Irish Deposit Administration Scheme.

Internet banking

Egg Savings Account pays 6.3% on a minimum GBP1. Unusually this rate is fixed for 12 months after you open the account. It looks particularly attractive as interest rates are expected to fall sharply over the coming year. Egg is part of American bank Citibank and you are covered up to GBP50000 under the UK scheme.
Yorkshire Building Society Internet Saver pays 4.56% on a minimum GBP1. It does not pay the very top rate but has paid a consistently good rate and been close to the leaders since it was launched three years ago. The account also comes with a cash card so you can withdraw money from ATMs.

Phone and mail banking

Coventry BS Sixty-Plus Post Save pays 5.28% on GBP500 or more. The rate includes an extra 0.68 percentage points for a year. But it will still offer good value as it comes with a guarantee to pay at least base rate plus 0.25 percentage points until March 31 2010.

It is open only to those aged 60 and over. Look around for a better deal after 12 months when the bonus runs out. West Bromwich Building Society Stratus pays 5.25% on a minimum GBP1000 which you run through the post. It limits you to six withdrawals a year but guarantees to pay at least base rate currently 5% before tax until October 1 2009. Or you can access the account through its 47 branches.

Tax free cash Isas

Kent Reliance Direct 65 Isa pays 6.31% tax-free on a minimum GBP30000 for those who are age 65 or over or 6.26% on its Direct Isa under 25 on GBP1 minimum for those aged between 16 and 25. Both are new postal accounts from the building society so you will have to watch the rate carefully.

Source: Universal Accounting : http://www.universalaccounting.co.uk

Anjitha is a financial adviser and well known for his finance related articles . You can find more financial articles written by the author by visiting the following link . mathematical mortgage formula

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