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Interest rates may have fallen sharply, but there are still a handful of accounts out there offering savers a rate of 7% or more. But get your skates on - some of these are likely to be withdrawn within days.
"At the start of the month, there was an abundance of accounts paying well over 6%. These are now disappearing fast and will no doubt be gone by early next week as more cuts are announced," warns Michelle Slade at Moneyfacts.co.uk.
Here we highlights some of the top-paying accounts still available:
Best for regular savings ...
If you are happy to commit to paying in a set amount each month, the regular savings accounts from Barclays (Monthly Savings) and Abbey (Fixed Rate Monthly Saver Issue 7) offer a stunningly good deal in the current low-interest rate environment. They pay 7.49% and 7.25% gross respectively, with these rates fixed for a year.
These accounts are open to anyone (you don't have to be an existing customer of either bank) and allow you to pay in between £20 and £250 a month by standing order for 12 months. That means the maximum deposit is capped at £3,000.
In the case of the Barclays account, interest is paid monthly, and there are no restrictions on taking your money out during the 12-month period - though if you make a withdrawal, the rate you get for that month will be just 2.99%. If you save the maximum £250 a month, you will receive £124 gross interest at the end of the term, provided no withdrawals are made.
The Abbey account pays 7.25% provided no withdrawals are made during the 12 months. If you pay in less than £20 during a month, miss a payment, or take any money out, the rate plummets to just 0.1% on the total savings balance for that month only.
The other advantage of these two is that both Barclays and Abbey are big banks that probably fall into the "too big to fail" category. The Halifax (part of HBOS, being taken over by Lloyds TSB) offers Regular Saver, which allows you to save between £25 and £500 per month for 12 months by standing order and get a rate of 7% fixed for a year.
You don't have to save the same amount each month, but no withdrawals or missed payments are allowed during the period, otherwise the account will close. It is quite possible any of these accounts could be pulled very soon, so if you want one, apply online or pop into a branch today.
Best for a lump sum ...
Your choice here depends on things such as whether you are happy saving online and how much you want to stash away. Don't forget that if you have more than £50,000, split it across several banks to ensure you're covered compensation-wise. The Internet Saver account from The AA (theaa.co.uk) offers one of the best rates out there: 6.28% gross. You can invest from £1 upwards and make unlimited withdrawals.
However, the rate is variable - so it could well come down. You have to operate this account online, and need a linked bank or building society account so you can transfer money in and out.
Also, be aware that the AA' s savings accounts are operated by Birmingham Midshires, which is part of the HBOS group. Birmingham Midshires offers a similar online account called e-Saver (Issue 2) which pays a variable 5.83%.
Alternatively, with interest rates set to fall further in the coming months, locking into a fixed rate savings bond seems to make sense. Birmingham Midshires has an online fixed rate bond paying 5.75%, but it only runs for six months. Two foreign-owned banks - Anglo Irish Bank and ICICI Bank - are both offering this same rate on one-year fixed rate bonds. If you want to fix your savings rate for two years or more, the rates are lower.
And how to earn 8% interest ...
If you take out an Alliance & Leicester Premier Direct online current account, it will pay you a whopping 8.19% gross, fixed for a year, on balances up to £2,500 (balances over that earn just 0.1%). After 12 months, the rate falls to Bank of England base rate minus 1%.
Abbey has the catchily-named "Preferred In-Credit Rate Bank Account" paying 7.72% interest on balances up to £2,500 for the first 12 months, provided you pay in £1,000 or more each month.
• The FSA said this week that savers at Derbyshire and Cheshire building societies will retain separate compensation after the takeover by Nationwide.
We'll give you £300 if you save with us
As many as eight million people on lower incomes will be entitled to £300 of "free" government cash if they pay into a new type of savings account, it emerged this week.
These US-style "Saving Gateway" accounts have been a long time coming - they were first announced in 2001 and have been piloted twice since then. They will finally become a reality in 2010, when banks, building societies, credit unions and the Post Office will start offering them. The accounts will run for two years, and their big selling point is the government will make a 50p contribution for each pound saved.
But don't get too carried away; the maximum monthly government contribution will be £12.50. To get that, an individual will need to stash away £25 a month. Assuming someone pays in £25 every month, at the end of the two years he, or she, would have amassed £600, plus £300 of government top-up cash. Presumably they would also have earned some interest, too.
To be eligible, an individual will have to receive one or more qualifying benefits/tax credits from a list including income support, jobseeker's allowance, severe disablement allowance, working tax credit and child tax credit. Those receiving tax credits will have to have an income below a specified level. Ministers say the accounts are designed to "kick-start" a saving habit among working-age people on lower incomes.
The Saving Gateway has been closely modelled on a US concept called the individual development account, which works by matching the money people put in with a contribution from public or private funds.
In America, people often have to save for a specific purpose, such as buying their first home, starting up a small business or funding post-secondary education, but it is understood that in Britain there will be no such restrictions. Many of the US schemes offer a $2 top-up for every $1 saved.
However, an evaluation of the UK pilot schemes found "it was not necessary to offer match rates as generous as pound-for-pound, in order to incentivise people to save".
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