The most consistent savings accounts

If you don't want to keep moving your savings around, but want your savings account to remain competitive, opting for consistency could be the answer...

These days, savings rates seem to be chopping and changing all the time. What with more savings accounts now offering bonuses and the base rate remaining low at 0.5%, it can be difficult to keep track of which savings account is paying the best rate of interest. And quite often, what initially seemed like a competitive savings account, suddenly no longer is.

Of course, if you want to ensure you're constantly getting the best possible interest rate on your savings, you need to keep your eye on the ball. And that means you need to regularly check what interest rate you're receiving, and if you're not happy, move your funds to a different savings account.

But let's face it, this can be a lot of hassle to say the least. So if you don't want to continually move your savings around, you might find the solution lies in consistent savings accounts.

What is consistency?

Consistent savings accounts are accounts which, over the past three years, have been proven to provide the highest returns overall. They didn't offer the highest rates at any one time, but still, over three years, savers with these accounts did the best of anyone who didn't switch during this period.

So if you don't want to constantly be chasing the best buy deals, the past performance of these accounts should give you some reassurance that you're going to get a decent rate of interest, even if it's not the very best.

Of course, there's no guarantee that they will continue to be a consistently good savings provider over the next three years, but I think their good track record is a decent indication of how well they will treat their customers in the future.

The top accounts

The chart below shows the six most consistent internet savings accounts (without a bonus) over the past three years, according to Moneyfacts:

Based on interest earned on £1,000 in 36 months to 1 October 2009

I wouldn't blame you if, looking at this chart, you're not particularly impressed. After all, these aren't exactly the most exciting interest rates around - or the most competitive. Instant access best buys currently pay around 3% AER, as you can see from our savings centre.

But most of these best buy savings accounts on the market are attempting to lure in savers with juicy bonus rates of around 2% or more, only to withdraw these bonuses after a year, leaving you with nothing but a teeny tiny rate of interest.

If you'd prefer not to bank online, the following table shows the most consistent no notice accounts that you can operate in branches or by post, over the same there year period:

Based on interest earned on £10,000 in 36 months to 1 October 2009

In this case, it's Beverley Building Society's Postal Account that takes the consistency crown. Again, 1.65% isn't a particularly enticing rate of interest. But unfortunately, it seems that if you want to earn more than that, you'll need to be prepared to switch accounts constantly to chase the best rates.   

Tax free savings

So how about if you're more interested in tax-free savings, and want to invest your money in cash ISA? The chart below highlights six of the most consistent accounts:

Based on interest earned on £3,000 in 36 months to 1 October 2009

In this case, it's Earl Shilton Building Society's 90 Day Cash ISA that's the winner. And in fact, if you have at least £10 to invest, this account is pretty competitive at 2.45%.

To put this into perspective, the best buy cash ISA which you can open with just £1 is the First Direct Cash e-ISA offering a fixed rate of 3% until 3 November 2010 - which isn't significantly higher than the 2.45% offered by Earl Shilton. But with the Earl Shilton BS 90 Day Cash ISA, you don't have to worry that the rate of interest is going to plummet after the first year. The First Direct Cash e-ISA, on the other hand, will drop to a paltry 0.20%.

You can find out more about the Earl Shilton BS 90 Day Cash ISA in my short two-minute video review of this account. Watch the video now!

Best of the building societies

Overall, building societies come up trumps when it comes to consistency, with 77% of the most consistent savings accounts being offered by building societies, according to Moneyfacts. Birmingham Midshires and Bath Building Society offer the most consistent products.

Of course whether or not you're prepared to sacrifice interest on your savings for consistency is entirely up to you. And if you'd prefer to invest your money in a best buy savings account, make sure you check out the top 18 savings accounts.

But if you are going to choose a best buy savings account, you need to be disciplined enough to switch again when your savings rate is no longer competitive.

If this sounds like too much trouble, or you simply don't have the time to keep changing your savings account, choosing a consistent savings account can be a great solution. You might not get the very best rate of interest, but it should remain competitive over the long term.

Get help from lovemoney.com

If you need a bit of help getting into the savings habit, we can help.

First, adopt this goal: Build up an emergency savings pot

Next, watch this video: How to save when you've got no money

And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

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