Crunch proving a boon for savers

Savers are currently benefiting from interest rates as much as 1.30 per cent higher than they were in 2006, it has been discovered.

According to Moneyfacts.co.uk, the best available rate on a no-notice account currently stands at 6.40 per cent compared with a figure of 5.30 per cent in December 2006.

Meanwhile, the rates on the top ranked internet accounts are up from 5.45 per cent to 6.51 per cent.

The increase in rates being paid on savings accounts has been attributed to banks and buildings societies increasingly competing for customer deposits as they attempt to restore their credit crunch-hit balance sheets.

Michelle Slade, an analyst at the site, said: "Rates on standard no notice accounts, the most popular type of account, have not been over six per cent since April 2001 and then base rate was 5.50 per cent.

"People with existing savings or those starting to save, including first time buyers saving their deposit, find themselves in a strong position as the banks and building societies continue to fight to tempt savers through their doors."