Rates for savers take a tumble

SAVERS' rates tumbled this week as one building society after another cut interest rates.

The Britannia and National & Provincial building societies announced yesterday their rates were coming down an average of 0.4 percentage points, a slightly larger drop than those announced by Halifax and Alliance & Leicester and less than those at Bradford & Bingley.

Northern Rock Building Society's instant access postal account offers the best rates, with 10.95 per cent gross or 8.21 per cent on a minimum investment of pounds 20,000, following the closure of the Skipton postal account.

Interest on Cheltenham & Gloucester's London postal account remains at 7.5 per cent net, or 10 per cent gross, on a minimum deposit of pounds 2,500.

Postal accounts from Scarborough, paying 7.5 per cent net, or 10 per cent gross on a deposit of pounds 1,000, and the Norwich and Peterborough, with 7.54 per cent net, or 10.05 per cent gross on the same investment, are also attractive. Stroud and Swindon Building Society's Tessa pays 11.6 per cent on a deposit of pounds 100. Allied Trust Bank's Tessa pays 12.68 per cent, but this is only if you can put pounds 9,000 into a feeder account.

Prosperity's one-year guaranteed income bond is the market leader, with returns of 8.7 per cent for basic rate taxpayers on a minimum investment of pounds 25,000.