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Supermarket Sainsbury’s have launched a savings account for customers to go head-to-head with rival grocery store Tesco — and slightly beat their rate.
There is also an added incentive for regular customers of the supermarket to sign up, with Nectar card holders receiving an additional boost to their interest rate, for a total of 4.35 per cent.
While not quite among the very highest rates on offer, the familiar name and easy access nature of the account will be a draw for some consumers. Unlimited withdrawals are allowed, accounts can be opened with £1 and interest is paid monthly.
To open an account you need a smartphone or tablet, be a UK resident and have a current account (with any bank) that you can link to the savings account to put in and withdraw money.
Sainsbury’s say it is the highest-rate savings account available from a UK supermarket brand, which also applies for non-Nectar card holders, given they will get a slightly lower rate of 4.25 per cent.
Tesco Bank offers an Internet Saver account giving 4.24 per cent, or a tax-free cash ISA at a 4.2 per cent rate.
Both Tesco and Sainsbury’s have a 12-month bonus attached to their accounts, which has become a familiar practice by banks and finance apps this year to lure in new customers.
While boosting the interest rate for a year, after the bonus expires the easy access account with Sainsbury’s will drop to just 1.25 per cent, far below the rate of inflation and highlighting the need for savers to ensure they keep on top of those dates and move their cash again accordingly.
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The underlying interest rate for most easy access savings accounts, including the supermarket-run ones, is variable – meaning it can go up and down if the Bank of England change the base rate.
Sainsbury’s Money are offering this savings account, as well as loans, through a partnership with NatWest to utilise their technology.
“We know customers want their savings to work hard for them, but they also want the flexibility to access their money when they need it,” said Patrick Short, director of financial services at Sainsbury’s. “That’s what we’ve built this account around: a competitive rate, instant access and no minimum balance, with an even better rate for Nectar members. With our new personal loans and instant access savings accounts now available, we’re giving customers more choice whether they’re borrowing or putting money away.”
