Media centre Tesco Finance & Insurance

Fewer than one in three savers (30%) polled could say that their chosen provider had increased rates following the rise in May, and only a third (33%) are confident that they will get a higher rate for their cash following last week’s increase.

Nearly half of all instant access savers (48%) were even unsure about the rate their savings provider was giving them.

Jeremy Sutton, head of Tesco Savings comments: “It’s not surprising that savers are beginning to lose faith in some companies over the past few months. Recently, the numbers passing on the full base rate rise seems to be dwindling. Customers who choose an account that gives them immediate access to their money when they need it seem to come off worst.”

Over half of the people (56%) polled in the UK representative survey said they save regularly using an instant access account. The majority (85%) do so because they need to know they can get immediate access to their cash if required.

When instant access savers are looking for a home for their money, it’s not the highest rate that is of utmost importance to the largest number of people, but actually a combination of factors such as trust, convenience, instant access and good rate:

·         Combination of trust, convenience and good rate is most important (27%);

·         Convenience (23%);

·         Highest rate (22%);

·         Instant Access (17%).

Sutton continues: “We are committed to offering our instant access savers a combination of great value, convenience and instant access. That’s why since 2000 we have passed on the full benefit of every rate rise and have introduced regular promotions to reward our customers for choosing to save with us.”

The majority of instant access savers (85%) feel neglected by some companies in favour of others types of savers  To help restore their faith, Tesco Instant Access savings is rewarding new customers who open an account by 14 August 2007 with an extra 1% gross/0.5%AER, above the standard rate, for six months from account opening.

Below is a table, which shows the current gross Annual Rates including 6-month bonus of 1%gross/0.5% AER.

The bonus is calculated on the daily cleared funds held in the account for the first six months that the account is open. It is applied to the account as part of the total interest earned at the next interest payment date following the end of the 6-month bonus period.

Tesco Savings is also continuing to pass on the benefits of the latest Bank of England interest rate rise to savers, with yet another rate increase of the full 0.25%. The increase, effective from 15 August 2007, will see Tesco Instant Access Savings customers receive the following gross annual interest rates:

New customers who open a new account before the 14 August 2007 will receive their additional 1% bonus on top of these new rates for the remainder of the six month period.

Sutton concludes: “The key to instant access savers getting the right account with the right attributes is to shop around. Make sure you know what rate you’re getting and what your company’s track record is like for passing on base rate rises. It’s also worth checking out if the provider has cut rates out with the base rate hoping you won’t notice. And, if you’re not satisfied with the answer, then it might be time to switch.”

For further information, please contact:

Monica McCormack, Tesco Personal Finance,
0131 523 5533/07802 319 266 – lynne.roxburgh@tescopf.com

Lisa Loveday, Haggie Hepburn,
020 7334 7777 -lisa.loveday@haggiehepburn.com

• Survey conducted online by 72 Point during June 2007, surveying over 1176 UK adults.
• The bonus offer is available on all balances of £100,000 or less, and on all new accounts that remain open during the full six months bonus period.
• Tesco Savings offers instant access.
• You can pay in and withdraw cash at more than 600 Tesco stores.
• The minimum balance in a Tesco Savings Account is just £1.
• To apply phone 08457 10 40 10, pick up a leaflet in store, or visit tesco.com
• Customers with Tesco Savings Account can also manage their account over the Internet.  The internet service allows customers to:-
  • Check their account balance
  • See what payments have been made into or out of the account
  • Make regular, or one-off deposits, into the account from other accounts
  • Transfer money from their Tesco account to another current account
  • Transfer money between the savings account and their Tesco Clubcard Plus
  • Print out balances and statements
• Account statements are sent to customers' quarterly.
• The flexible direct debit facility enables customers to phone at any time to pay any amount from their personal bank account into their Tesco Savings Account - 24 hours a day, 365 days a year.
• A freephone number 0800 78 38 001 is available for customers to find out the balance of their account together with the last six transactions.

Tesco Personal Finance, the financial services arm of the UK's number one supermarket chain, was launched in July 1997 and offers a combination of Internet, supermarket and telephone banking. Tesco Personal Finance now has over 5 million customer accounts. It provides a range of 22 low cost, value for money financial services covering General Insurance, Lending and Savings & Investments.  It is a joint venture between The Royal Bank of Scotland Group plc and Tesco PLC. Tesco Personal Finance Limited. Registered in Scotland No 173199.Registered Office 24 St Andrew Square.