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Thursday 25th September 2008
Savers continue to be the big winners of the credit crunch, new data from best-buy tables suggests.
Rates for both tax-free cash ISAs and mainstream savings accounts are on the up, the Guardian reports.
The high-street "savings war" is a direct result of the credit crisis, the primary feature of which is the freezing of inter-bank lending.
With access to funds on these money markets limited by the high cost of borrowing from each other, many financial firms have looked to attracting customer deposits as an alternative way of raising money.
Therefore, banks are currently locked in fierce competition to secure as many new savers as possible - which has had a marked effect on the interest rates they offer.
Top picks from the newspaper include Icesave's easy-access cash ISA, which offers 6.1 percent tax-free for initial deposits of over £1,000. This is equivalent to ten percent gross a year for higher-rate taxpayers.
Alternative cash ISAs include Barclays' Tax Haven product, which comes to 6.08 percent. However, there has been some controversy over this account, with financial websites including Moneysavingexpert complaining that customers are facing long waits and poor service.
For mainstream, or taxed, accounts, the leader of the pack is currently Kaupthing Edge, which offers a rate of 6.55 percent. Other "strings-attached" products offer still higher rates, with the Darlington building society's Monthly Supersaver at eight percent for people paying between £50 and £250 in every month.
Meanwhile, Barclays' Monthly Savings pays 7.49 percent for monthly deposits of between £20 and £250.
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