One personal and business bank account has increased the interest rates on its instant access saver above the 3 per cent mark, sending it climbing up the best buy tables to the penultimate spot.
The Post Office’s new online banking saver offers truly unlimited withdrawals free of any penalties and fees, which distinguishes itself from former best buys which limited savers to just one withdrawal every year from their savings accounts. The opening annual rate on the account is 3.01 per cent, and customers need only £1 to take up the account.
Much like many savings products on offer in the UK, the Post Office’s Online Saver carries a bonus rate of 1.36 percentage points that expires after the initial 12 months of the account. While many savers express frustration with having to switch providers after a year to remain in a competitive savings product, the Post Office’s product has one of the smallest bonus rates currently on the market.
While the product in question drops in value to a 1.65 per cent rate of return after the first 12 months, other savings products, such as the Online Saver from Halifax and the instant access savings product offered by ING Direct, drop to 0.1 per cent and 0.5 per cent respectively after a year. This leaves the Post Office in direct competition with the Principality e-Saver after a year, though it does offer a higher rate of return before the 12 month expiration date.
However, other savings products do exceed the Post Office offering, such as the eSaver from Santander, which carries a 3.10 per cent rate of return. The bonus rate on this account is a sizable 2.60 percentage points, leaving Post Office customers catching up quite swiftly.