Do internet savings accounts offer better rates than conventional ones?
They ought to. What online banks save by not having branches to maintain and paying staff for phone banking or handling post, should be passed to customers. But headline rates and the bonuses are deceiving. Egg is offering 3.75 per cent plus a bonus of 0.75 per cent for six months. After that, its rates of interest are guaranteed to track the Bank of England’s base rate until 2007. Others, including Northern Rock, ING and Abbey, have higher headline rates.If time bonuses are offered, watch what happens after the end. The rate of return can drop below the underlying rate. You should get a higher return by tying your money up for longer, perhaps three years. Headline rates change constantly so check one of the best-buy tables offered online by Money Supermarket (www.moneysupermarket.com/Savings) or one of its competitors. What other advantages are there? There are no delays waiting for cheques to be cleared. And you are in control of your own money in that you have easy access to it. You
