Sainsbury’s launches internet saver account

Sainsbury’s Bank has announced that it has joined the "five per cent club" by launching an internet-based savings account with an annual equivalent rate of five per cent gross.

This interest rate is available on balances from £1 and the lender claims that there are no restrictions or short-term bonuses on the offer.

According to Sainsbury’s there are many providers who offer rates of five per cent or more but with a number of terms and conditions.

The company claims that there are currently 38 accounts offering headline rates of five per cent or more, but 18 of these rely on an introductory bonus of an average of 0.595 per cent.

Another 23 of the 38 offers have restrictions of some kind, Sainsbury’s claims, with the most common condition being the need to give notice before withdrawing money.

"Interest rates of five per cent or more are very attractive but some of the accounts paying these are heavily reliant on short-term bonuses or restrict access to your savings," said Peter Wood, director of savings at Sainsbury’s Bank.

"Before choosing an account, make sure you understand and accept what your interest rate is dependent upon otherwise you could be in for a nasty surprise when it drops."