Sainsbury's offers higher rates for savers

Sainsbury’s Bank has issued a five year guarantee that between now and August 2008, it will pay above market average rates of interest on its savings accounts*.

The bank’s research reveals that one in ten people with savings accounts have either never reviewed their rates of interest or have not done so for at least three years. It is urging savers to keep a closer eye on the rates of interest they are receiving, and that if these are not consistently attractive, they should be prepared to switch providers.

The bank’s research reveals that savers have been treated particularly poorly in recent years. For example, the average rate of interest on no notice accounts for sums of £2,500 is now 1.7% - Sainsbury’s Bank’s Direct Access Saver Account offers 3.2% for savings of this amount. Furthermore, between August 1998 and August 2003, the average interest rate on the top 10 no notice savings accounts fell by nearly 50%. And more worryingly for savers, between 1997 and 2003, only a third of no notice savings accounts that offered among the top ten market rates of interest were still doing so 12 months later.

Donald Jarvie, Savings Manager, Sainsbury’s Bank said: "A number of banks take unfair advantage of cuts in the Bank of England base rate. They often slash their rates by much more in the hope that their customers won’t notice, or if they do, that they cannot be bothered to switch to another provider such as Sainsbury’s Bank, that has a track record for consistently offering attractive rates of interest.

"Millions of pounds worth of interest which has recently been wiped off people’s savings could be restored if they switched to accounts that consistently paid fair rates."

Independent research reveals that Sainsbury’s Bank’s savings rates are among the top quartile in the marketplace. The bank currently offers up to 3.3% gross pa/AER on its Instant Access Savings Account and up to 3.75% gross pa/AER on its Direct Saver Account. Both accounts offer 24 hour banking and there are no penalties for withdrawing cash.