Alliance and Leicester increases interest rate on eSaver

Alliance & Leicester is increasing the interest rate on its popular eSaver account to 6.56% AER for savers who open a new account.

The account includes a bonus of 0.94% AER, payable until 7 December 2009.

The new deal is an increase from 6.50% AER, which eSaver has paid since it was first launched in November 2007, despite three cuts in the Bank of England base rate since then. All existing eSaver customers will continue to benefit from the 6.50% rate.

It is designed for long term savings rather than for regular dipping in, and pays the same level of interest on all balances from £1 up to £500,000. It is one of a new breed of savings accounts which offers a high rate of interest but, instead of locking away your money like a notice account, offers instant access if you need to access your money. However, to encourage people to become long term savers, interest is not earned for months in which withdrawals are made, except during the month of July when withdrawals can be made with no loss of interest.

Alliance & Leicester's eSaver account offers:

• Rate of 6.56% gross pa / AER variable
• Minimum balance £1, maximum £500,000.
• Open online and manage via Internet Banking using any linked current account
• No notice for withdrawals, however, no interest will be paid on the whole balance in any month a withdrawal is made, except July.
• Interest paid monthly, either back to the eSaver account or to the linked current account.
• Only one account per person.

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2008-09-05 00:00:00 © Moneyextra.com