Check savings account rates at the small building societies

The eye-catching billboards and press advertisements tend to promote the savings account rates of the big banks and building societies. Savers chasing the best returns are advised to look beyond the familiar names, and study rates at some of the smaller building societies. Their deals are often among the most competitive on offer.

For example, the West Bromwich Building Society (westbrom.co.uk) has a good deal on an online easy access account, paying interest of 2.81%. You can invest between £1000 and £250,000.

Northern Rock (northernrock.co.uk) offers one of the best rates for a Cash ISA at 3.05%, on balances from £1 to £2 million. Interest is paid annually, and you can transfer an existing ISA.

For Notice accounts, usually asking for 120 days notice before you withdraw your money, some of the best rates come from smaller building societies. Check the deals from companies like Aldermore, Market Harborough Building Society and Melton Mowbray Building Society. These accounts can usually be operated online, by phone or by post.

Savings account rates are constantly fluctuating in a competitive market. Use comparison sites and the financial press to keep your finger on the pulse, and move quickly to secure an attractive rate, as great deals can disappear quickly.

It's understandable, given a volatile economic climate, that some savers are worried that attractive savings account rates are counterbalanced by the increased vulnerability of smaller institutions. They should be reassured by the knowledge that £85,000 of savings in any UK-based building society are fully covered by the Financial Services Compensation Scheme. Check that your bank or building society is included in this coverage.

They key to finding the best savings account rates is astute shopping around. Read the fine print for conditions, and beware of attractive initial rates that quickly revert to a mediocre return. Make sure the conditions are not too punitive if you need to withdraw your money at short notice.

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