Rate Watch: The best rates for savings, credit cards and current accounts

Lorna Bourke's Rate Watch scans the markets for the deals that offer great rates and make the most sense for most people.

All offers are independently handpicked by Lorna Bourke and neither she nor Citywire receive any form of commission or kickback for the selections.

Savings: 6.81% Birmingham Midshires

Fixed rate bonds and term accounts are offering some extremely good rates, reflecting the difficulty mortgage lenders are having in financing their lending. Birmingham Midshires is in the market with a one year BM Direct internet account paying a cracking 6.81% gross for annual interest, or 6.61% gross for monthly interest. A six month version pays even more at 6.82% gross.

Full details at www.askbm.co.uk

Credit Cards: 0% on balance transfers and cash, Abbey Zero

Abbey’s new zero credit card is unique in that it charges no fees for balance transfers, foreign exchange or cash and offers 0% interest on balance transfers for six months. 

Almost all credit cards levy a fee of around 2.5% to 3% of the balance transferred for this facility and a similar charge when a card is used abroad. Nationwide is one of the few other card issuers which doesn’t have a foreign transaction fee.

Normally Abbey's foreign exchange fee is 2.75% and its balance transfer and cash advance fees are 2.5% or a minimum of £3. However, on Zero, these fees are waived. In addition, the card offers an introductory six-month interest free period on balance transfers and purchases.

‘However, the card has a relatively high interest charge at 18.9% on purchases or 25.9% on cash advances, so if you are going to use the credit you could probably do better elsewhere if you are a good credit risk.

‘The launch of this card is fantastic news for consumers,’ commented Michelle Slade of independent comparison website Moneyfacts. ‘Not only will those looking for a short-term balance transfer deal benefit but also those who are about to embark on their summer holiday.

For further information visit www.abbey.com