The good, the bad and the ugly

Adam and Anna go west to look at interest rates

by Working Lunch's Adam Shaw

Saving rates are at lows not seen for nearly 40 years.

With UK base rate at 4% you've got to squeeze every last bit of interest out of your savings accounts.

And it's not just the interest rate that distinguishes a worthwhile account. Bonuses, notice periods and consistency all make a difference.

Financial advisers Chase de Vere have been studying accounts and compiled their own list of the good, the bad and the ugly.

The good

Cheltenham & Gloucester

Scottish Widows

The bad

Smile

Barclays

HSBC

NatWest

Lloyds TSB

The ugly

Scarborough Building Society

Birmingham Midshires

Why?

Chase de Vere favours Cheltenham & Gloucester and Scottish Widows accounts because they offer consistently good rates of interest - and not just this year, but over time.

"Northern Rock is another one that's always competitive," says Anna Bowes from Chase de Vere.

The largest group is the "bad". And it's these banks' current accounts that have placed them here.

Anna: separating the good from the bad and the ugly

"Whatever happens they won't move their interest rates up," explains Anna. "They stay at 0.1%. Other people do offer better."

Smile is paying a good, competitive rate at the moment - 4% on their Isa - but Chase de Vere defend their categorisation.

"They've dropped their rate by 3.25% over the past two years," says Anna.

"Base rate's only dropped by 2% so you are not really in what you originally went into."

The "ugly" are so called because they make it difficult for you to get hold of your money.

"They're not clean accounts," explains Anna. "They've got restrictions on withdrawals or big bonuses.

"Scarborough are renowned for giving big bonuses that will fall away after six months."

Consistency

With rates so low, being a "rate tart" - moving your money around to get the best deal - may seem like hard work and not really worth doing.

What you should look out for are accounts that pay a consistently good rate.

Also bear in mind that different accounts have different terms and conditions. For example, make sure you know if you'll be penalised for withdrawing your money without giving notice.