The Saga Savings Internet Saver (Issue 16) Savings Account offers the variable interest rate of 1.55 per cent gross AER on balances of between £1,000 and £1m.
Interest is paid annually on the limited issue which was launched earlier this month.
Withdrawals are allowed, but the interest rate is 0.50 per cent gross AER on balances of under £1,000.
The rate includes a 12-month fixed bonus of 1.05 per cent gross AER, but after 12 months the interest rate is 0.50 per cent gross AER.
Monthly gross interest on the account is 1.54 per cent AER or 1.23 per cent net.
Earlier this year Saga joined the Equity Release Council.
As a member of the council, Saga was able to guarantee its customers that it offered products and services which conform to the best practices of the sector.
Saga provides a range of products and services to 2.1m customers over the age of 50, including the Saga Equity Release Advice Service, provided by Just Retirement Solutions.
Jeff Bromage, chief operating officer at Saga Personal Finance, said: “As our population ages and the over-50 population increases, we have seen a growing need for a diverse range of financial solutions in retirement.
“Housing wealth is often people’s biggest asset, so it makes sense to be able to draw on this as part of financial planning in later life.”
Provider view:
Jeff Bromage, chief operating officer of Saga Personal Finance, said: “As more of our customers than ever are using the internet to find the best home for their hard-earned savings, we are delighted to launch this new online account,with its attractive interest rate to complement our suite of savings accounts.
“This new rate is ideal for savers who want to make sure their money is working hard for them, while at the same time providing convenient access to their savings should they need them. As with all of Saga’s accounts there is the option for people to receive their interest monthly or annually, which is key for many over-50s who rely on savings to boost their monthly income.”
Adviser view:
Anna Bowes at London-based Savings Champion said: “Saga launched this account just after withdrawing its telephone savings account, and BM Solutions, which is a fellow HBOS savings provider has also just withdrawn its 1.6 per cent savings account.
“We had the position where all the best buy savings accounts were HBOS-licenced providers, sharing the Financial Services Compensation Scheme licence, which means if savers had more than £80,000 with different HBOS savers they would not be entitled to full compensation if things went wrong.
“It’s a best-buy rate, but we can’t help thinking savers may not be aware of all this.”
Charges:
No charges.
Verdict:
Saga’s rate is not a headline-grabbing one, but considering the Bank of England has opted to keep rates the same, it may provide a haven for some savers.
However, some analysts have claimed that savers need interest rates to rise fourfold for their incomes to recover, so while Saga’s account may help provide a port in a storm it is certainly not a long-term solution for investors whose savings will require inflation-busting interest rates to provide them with a decent income.
