Latest findings from the Index (27 October 2006 to 27 January 2007) reveal that the average interest rate for balances of this amount is 4.03%.  This is 1.62% below the best returns savers can obtain for balances of £1.  The Index reveals a number of accounts pay derisory returns on balances of £25,000 and many of the best buys rely heavily on short term bonuses.

Research for the Investec Savings Index reveals the following savings accounts offer the most consistent rates of return for the period 27 October 2006 until 27 January 2007.

Table 1

Poor returns   

Despite two 25 basis point increases in the base rate since October 2006, between 27 October 2006 and 27 January 2007, 102 accounts for balances of £25,000 failed to increase their interest rates and one bank dropped the rate on an account.

During this period, the Index shows that out of 865 accounts reviewed, 128 now pay 3% or less for balances of £25,000, compared to 201 in the previous quarter (26 July to 26 October 2006).  It shows that 46 accounts still pay just 2% or less in interest for balances of this size.

Table 2