Savers who have little to savour

By Steve Lodge personal finance editor

If you believe the Halifax, this coming week's round of increases in savings rates is rise number five this year for its customers. Some banks and building societies might even lay claim to more, and it is hard to argue with analysts' predictions in these pages six months ago that this will be a "year of the saver". But it is important not to get blase.

Yes, the ex-societies are keen to prove they're not a bunch of money- grabbing bankers and so not lose all their hard-earned customers overnight. And among the societies left behind there is some genuine commitment to establishing themselves as a clear and "better" alternative. But, as we report on the back page of this section, both banks and societies are not always giving their Tessa savers the deal they might expect.

Many Tessa savers have been shortchanged by this year's rate rises, some have seen no rise at all. The 5 per cents paid on some Tessas - even if they are tax-free - are a slap in the face for savers, especially given these institutions' claimed interest in customer satisfaction.

There are also plenty of other "dog accounts" around, and savers can't rely on an announced rate rise to transform the account they're in. There is still the need to shop around. But then savers hit the problem that so many of the remaining societies now have such high opening balances that in many cases the best of their offerings will remain out of reach. Whatever happened to societies looking after the small saver? No wonder the likes of Sainsbury's Bank - whose new rate is 6.5 per cent on as little as pounds 1 - are doing so well.

I may not think much of the Manchester building society's Tessas (see again back page), but the society did ease my anger somewhat by assuring me that whenever it changed interest rates, it sent details individually to savers. It would be nice to see more banks and societies do this, rather than simply putting up a poster in a branch or taking out a small-print ad in a newspaper. Not everyone goes into a branch, let alone takes in the ads, but most people would like to know when they are being paid more - or less - interest on their savings. Surely a letter, even if it is a mailshot, would be the best way?

Something from Midland Bank that deserves (half) a plug! The bank has launched a no annual fee credit card that makes donations to Shelter, the homeless charity and pressure group, according to how much you spend. It donates pounds 10 when you take out the card and 25p for every pounds 100 you spend.

Now for the nerdy personal finance way of increasing your donation: take out Alliance & Leicester's Money Back credit card - which gives cash rebates of up to 2 per cent related to spending - and donate the rebates to Shelter. By my reckoning, assuming you spend a little over pounds 100 a month on the A&L card, you'll match the total Midland donation in year one and be well ahead thereafter. The downside is you have to arrange the donations yourself- unless A&L were to set up a facility for passing the rebates directly to the charity, that is. So how's about it, A&L? I will report back on the result of my customer suggestion in a future column.

q Contacts: Midland's Shelter card, 01702 353344; A&L Money Back credit card, 0500 838383.