Post Office launches best buy savings accounts

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Online Saver issue 4 pays 3.01%, including a one-year bonus of 1.36%. The account can be opened with as little as £1 and it allows unlimited withdrawals with no penalties.

The fifth issue of the Post Office's online bond promises savers 3.41% interest if they tie up their money for one year, 3.96% for two years or 4.21% for three years. All of the rates are fixed for the whole terms and require minimum deposits of £500.

Withdrawals aren't permitted within the fixed term although the bonds can be closed early and a breakage fee paid instead.

With both the easy access and fixed-rate bonds, savers can choose to be paid interest on a monthly instead of annual basis.

Top rates

Post Office director of savings Richard Norman says the Post Office aims to offer its customers "consistently competitive rates of return" as well as a "safe home" for their money.

He adds: "Both accounts offer easy online management combined with some of the best rates in the market."

Savers can apply online for the accounts with immediate effect.

Other good savings deals include NS&I's index-linked savings bond, which matches the rate of inflation plus 0.5%, and Bank of India's five-year bond.

It pays an average rate of 4.59% over the whole term, which can be broken down as follows: 3.1% after the first year, 4.25% after two years, 4.6% after three and 5.24% and 5.75% after four and five years respectively.