Savings 'price skirmish' breaks out

The top deals are only creeping up, rather than rocketing, though they at least represent a rise in returns given rates had been falling over recent months (see the Top Savings guide).

Earlier this week, Egg launched the joint-top best buy at 2.8% (with a 2.3 percentage point bonus for a year) on its Savings Account 2.

This is a virtually identical deal to that offered by the AA via its Internet Extra account. Both have a minimum funding requirement of £1.

Current top deal

Yet West Bromwich Building Society is the current best buy, if you can save at least £1,000.

Its Websave Bonus Account, launched within hours of the Egg account, pays an overall 2.83% for the next year (including a one percentage point bonus up to 31 March 2011).

This means you're effectively earning the equivalent of 3% for the next 10 months, while the bonus stands.

Alliance & Leicester will also up the rate on its Online Saver issue 7 account for new and existing customers to 2.81% (including a 2.31 percentage-point bonus for a year) from Tuesday, with a minimum £1,000 deposit.

Dan Plant, Moneysavingexpert.com money analyst, says: "This is more of a skirmish than an all-out price war. While rates are only scraping up, at least they are going in the right direction.

"Before this round of rises, new savers had been hit by a cut to the rates paid by the best accounts."

This article was updated on Tuesday, 1 June to add A&L's new deal.

Further reading/Key links

Best rates: Top Savings, Top Fixed Savings Stay safe: Safe Savings