Money: Moneytalk - No reward for loyalty

LAST week's decision by the Bank of England to hold base rates at 7.25 per cent is unlikely to mark the end of competition for savers. Rates on the best instant access deals have been rising steadily and in some cases now pay better returns than on accounts requiring notice, those with fixed rates or with other restrictions. At the same time, a big gap has opened between the returns on offer from many of the new deals and those on traditional instant access accounts.

The closing of the gap between instant and notice accounts in part reflects the expectation that interest rates will soon fall. But there is also an irritating element of window dressing in some of these moves.

Banks and building societies are back to their usual game of launching whizzy new accounts while keeping existing "loyal" savers on less attractive rates. Take the Woolwich's new instant access Card Saver, which pays a flat 7 per cent on as little as pounds 50. This is a better rate than on most of its notice accounts - even on quite high balances - and much better than on its passbook-based instant access Prime Gold account, which pays as little as 1.5 per cent.

Or consider the Stroud & Swindon's new Branch Instant deal, which pays a flat rate of 6 per cent on an account whose only real restriction seems to be that deposits and withdrawals must be at least pounds 100. The society's traditional instant account pays as little as 1.8 per cent.

Savers can always transfer, of course, although in some cases they might face penalties if they are in a notice account. And that's assuming existing savers find out about the new deals. In many cases, not surprisingly, institutions appear rather keener to woo new savers than to look after existing ones.

OPENING balances required for building society accounts carrying membership appear to be falling gradually. For savers who missed out on last year's windfalls, this could be a chance to spread bets for the seemingly inevitable next round. The Bradford & Bingley has a membership account that can be opened with as little as pounds 10 a month; savers can still open accounts with the Portman for pounds 100; and the Nationwide gives membership on balances of as little as pounds 1, though new account holders are required to sign away windfall rights to charity.