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Check out the deals on Post Office savings

With investments in the doldrums and interest rates likely to remain low for the foreseeable future, Post Office savings accounts may appeal to those who are looking for convenience, easy access and reliability ahead of substantial returns. It's worth checking out the various accounts next time you are queuing up for stamps.

ISAs and Online Savers

Although Post Office savings have been associated with grannies putting away a few pounds of their pension, or children saving up for school holidays, the Post Office is now offering increasingly sophisticated investments for savers. Some of the interest rates can compete with the banks and building societies.

Their Premier Cash ISA is paying 3.01% which is certainly a decent return. Savers can invest up to £5,640 in a Cash ISA each tax year and the interest is tax free. Existing ISAs can be transferred to the Post Office.

The Online Saver account looks attractive initially, with a headline interest rate of 3.01% gross. Look a little closer at the detail though and it is apparent that the interest rate includes a bonus of 1.36% for the first 12 months. Canny savers will move their cash elsewhere once the bonus period expires.

Post Office National Savings and Investments Children's Savings Bonds are a popular way of saving for a child's future, offering fixed rates of interest and a bonus every five years. Although interest rates are low at present, it can be helpful to get into a regular saving pattern as early as possible in your child's life.

How safe is your cash in Post Office savings?

The fact that Post Office savings are backed by the Bank of Ireland has troubled some savers who have read about the struggles of Irish banks. However all Post Office savings accounts are covered by the Financial Services Compensation Scheme, which means that £85,000 of your money is covered in the event of a bank failure.

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