'Best Buy' High Interest Savings Bank & Building Society Accounts

High Interest Savings Accounts and the Credit Crisis

When it comes to bank savings and building society savings you're going to want to make sure that they are in as safe a place as possible these days.

First, you need to ensure that the rate is as good as possible. But check too whether or not this rate includes some kind of bonus for say the first year. If it does then that's fine but rem,ember that in order to maintain that rate you'll probably need to move the money when the bonus period comes to an end.

When it comes to savings accounts with banks or building societies in the UK always check other terms and conditions, such as minimum investment, instant access or notice required. Is there a penalty for withdrawal within a certain time period? Check whether you can monitor and administer your savings online – this is very useful.

BACS, CHAPS and Bank Faster Payments, Cheques or Cash?

What sort of transfer methods are available with your chosen savings providor? The more types of transfer they accept the better. Here I deal with an explanation of the different bank transfer systems.

a) BACS Transfers
These are free and normally take up to four working days.

b) CHAPS Transfers
These are effectively same day transfers, although you must ensure the transaction is initiated before your savings bank's cut off time for same day transfers. They cost between about £20.00 and £40.00. Not all savings institutions accept these – so if it's important do check first.

c) Faster Payments System
The Banks Faster Payments System has only recently been introduced into the UK banking system and is still being embedded by various banks. Essentially it means that if both your bank AND the receiving bank are signed up to it you can transfer up to £10000.00 per day with a same day transfer of funds.

How safe is my money in a UK Savings Bank Account?

Once a question that hardly anyone ever asked, this has become a vital aspect of choosing a high interest savings account. As from October 7th 2008, savings in an FSA regulated bank account up to £50000.00 per account holder (£100000.00 per joint account) are covered by the FSCS (Financial Services Compensation Scheme).Bear in mind that the guarantee is per licence, which is not necessarily the same as per bank. Check that your savings are not in more than one bank that shares the same licence.

A number of foreign banks such as ICICI Bank are also covered under the FSCS, In the case of ICICI Bank, in the very unlikely event that you should need to make a claim ALL the claim would be against the UK FSCS. However, some overseas banks, also licenced by the FSA operate what is known as the 'passport exemption' scheme, where the first say £20,000.00 or whatever is their agreed amount would have to be claimed from that bank's home country compensation scheme and the remainder would be topped up to the current FSCS limit by the FSCS. So, as long as a bank is registered and authorised by the FSA and is within the FSCS then even though it is based abroad you should be covered. However, I personally would avoid overseas banks operating the passport exemption scheme.