Don't take an interest in the details

Clever Halifax! 'Launching the UK's Biggest Regular Savings Rate - 6.05 per cent AER'. What a wheeze! The best introductory gimmick yet! Mmm...

OK, here's how Halifax pitches its amazing deal. You save up to £250 each month for 12 months. If you give us £250 in the first month, we'll pay you a whopping 6 per cent interest on it, that's a whole £15 over one year. Some of our rivals wouldn't pay you much more than £11.25 for the same money. That means that, after one year, based on that one payment alone, you'll be£3.75 better off with us.

In the next month we'll pay you 6 per cent for 11 months for the £250 you paid in that month, for the month after that 6 per cent for 10 months and for your very last pay ment we'll pay you 6 per cent for a whole month. That means that for your last payment of £250 you'd get £1.25. Some other banks would only pay you about £1 for the same amount for a month.

We reckon that over the whole year (if you paid in the maximum each month for the period of the offer) you could be £20-£30 better off with the Halifax than with some of our rivals. (Of course, that's before tax and assuming that interest rates don't rise, which might make our offer look a little less competitive, but let's not dwell on that.).

And after 12 months? Ah. At that point, like all good things, the offer comes to an end. Unfortunately, we will immediately have to transfer all your capital (and the interest you have earned) into another of our accounts, which we need you to set up because this offer is not intended to last forever.

We realise that the interest on these other accounts is not quite as 'headline-grab bing' as our 6 per cent but you won't mind this will you? You'll be remembering that you got 6 per cent before. And you may just have forgotten about the transfer details a year from now. (Anyway, if you're unhappy with the interest we offer at that point, you can always take your money elsewhere - though we hope some of you won't do this for a while and it might take you and us a short time to get things properly organised in any event.)

So, what's the actual rate of interest we offer you on all your money saved over the year, which is probably the way you usually like to think about these things?

Working out what the figure might be would be a bit complicated to explain. You would probably have to speak to an accountant to get the right answer. (But you wouldn't want to do that would you?) We are going to pay you 6 per cent on your money for all/most/part of a year and that's the important point to remember. Please.

Halifax replies

Almost half of UK adults have little or no
savings. People said they wanted an account with
a great rate to reward regular saving. The rate
should be fixed - to prove it wasn't a short-term
introductory offer - over about 12 months. And the
regular deposits should be flexible, starting with a
small amount. After this fixed period, people
wanted unlimited access to their savings.

The Halifax Regular Saver account offers a fixed
rate of 6 per cent gross for one year. As your
standing order goes in each month, your savings
will grow, and you will earn 6 per cent on your
whole balance. This means that if you save ?250
on the first of each month for the full 12 months,
you will earn ?98 gross interest.

If you already have ?3,000 or more in savings, the
best home for it is an account which accepts lump
sum deposits and offers a good rate of interest,
such as a tax-free Isa. That said, the launch of this
account has been extraordinarily successful. Over
150,000 customers have already seen the benefits.