With interest rates at their lowest level on record, it’s not easy to find any half decent savings deals on the savings market, and savers are finding it tough to get any modest returns.

Higher-rate tax payers have been hit hard as a result of the National Savings and Investment’s withdrawing its tax-free index-linked certificates, as it was previously offering the equivalent taxable gross return of 10% providing that the current Retail Prices Index (RPI) rate stayed at 5%, giving savers more than double the returns that any standard savings accounts can offer.

An NS&I spokesman recently made an appearance on BBC Radio 4′s Money Box programme, and he said it was unlikely that another issue of index-linked certificate would be launched this year. However he denied that NS&I had any plans for future issues to track the generally lower Consumer Prices Index (CPI) instead of the RPI.

The Bank of England base rate has remained at its record low of 0.5% for more than 16 months now – and one economic forecasting group said it expects the rate to stay at this level until 2014 – which means most savings accounts are now actually losing money in real terms based on RPI inflation.

Some shares offer high dividend yields and those looking to invest small amounts can protect their returns from income tax by making use of their stocks and shares ISA allowance. However, there is no guarantee that you will earn any returns from shares, so there are risks involved, as we all know that share prices can increase and decrease depending on business performance.

If you have a savings account, check that you are getting a competitive rate. You may have initially opened it with an attractive rate, but most savings accounts offer introductory bonus rates that are valid for 12 months. After this period the rate paid on your funds can be significantly lower, so it’s important to keep an eye on your account and keep it competitive.

Also, rates tend to fluctuate based on the Bank of England rate, so once this begins to rise you should keep a close eye on the savings market. If you find you could be earning more, switch account – it’s much easier than you may think and banks are set up to welcome new customers so it is in their best interest to make the switch-over as smooth as possible.

If you’re looking for the best interest rates around and you don’t mind the thought of locking your savings away, you might wish to consider fixed rate bonds. These savings accounts allow you to fix a rate for an extended period of time (usually between 1 and 5 years) while fixing the period of time you effectively lose access funds. Leaving your funds untouched not only allows you to earn some great returns, but also gives give you more of an incentive to leave your savings to grow, while protecting them from being eroded by inflation.

If you require access to your funds due to unforeseen circumstances you can withdraw funds, however you will lose some or all of the interest.

The highest paying bond in our tables is currently the ICICI fixed rate bond, currently offering 4.75% on all funds from £1000 with no maximum. However this account requires you to leave your funds untouched for a 5 year period, so if this sounds like a long time to you, you can opt for a shorter term with a lower rate.

Although the UK banking crisis has settled down now, you should still spread your savings around to ensure they are 100% protected – never invest more than £50,000 (the limit covered by the Financial Services Compensation Scheme) with a single provider or financial institution, and be sure to check multiple banks do not fall under the same financial umbrella, as you may find that your group chosen banks only offer a single protection allowance between them.

If you really want to be clever about it you would be better to work to a limit of around £48,000 as this will allow any interest you earn to also be covered if your bank were to fail.

Are you still searching for the best isa rates but haven’t chosen a fund for your 2009- 2010 individual savings account (Isa)? Unsure about stocks and shares Isas? Worried you have less than two weeks, but you haven’t had a chance to scour the market to see what’s available? By comparing the current best is rates 2010 will be your best year yet!

●Step 1: decide on the level of risk you’re willing to take

If the current financial, economic and political climates has left you feeling uncertain, cautious, or nauseous (or all together), then attend to your symptoms with a Cautious Managed fund. This can help to offer relief from the pain of volatility – or at least, that’s what it says on the tin. M&G’s Cautious Multi Asset Fund claim to be able to help you “participate in rising asset markets while preserving capital as much as possible” – and since it was launched 3 years ago it has delivered 14.5%, outstripping the IMA Cautious Managed sector by 16.6%. The secret ingredient, known as an “active fund manager”, can “respond to the actual correlation of assets” and, in a 3-year clinical trial, minor discomfort to a 16.5% fall, peak to trough, while other leading brands lost 23%. (more…)

When you ask yourself the question “how much mortgage can I borrow”, the answer is dependent on your individual financial circumstances and not the amount which the lender is ready to offer you. You must remember that it’s not wise to go for the biggest loan that is offered to you but you must rather attempt to become qualified for a loan that is favorable for your budget and requirements. (more…)

Those looking for a good home for their savings may be interested to hear about a new product launched by Egg.

The Egg savings account was launched today (June 26th), as its new Bonus Savings Account, allowing customers to open an account with an initial balance of at least £1 and is available to both new and existing Egg customers.

This competitive savings account offers an interest rate of 2.8%, which includes a fixed savings rate bonus of 1.55 per cent for the first 12 months.

Furthermore, this savings account does not come with any limits or charges on cash withdrawals.

Sharon Maguire, head of banking products for Egg, states: “During times of unprecedented low interest rates, customers need to have the peace of mind that their savings account is making their money stretch further.”

Those on the search for an online savings account may also wish to consider the second issue of the Principality e-Saver, launched earlier this month.

Principality has increased savings rates on its instant access e-Saver account from 1.65% to 2.85% .

This is a very significant change and is likely to cause similar reactions from competitors which is great news for savers. There are terms and conditions that apply and this rate only applies for a year after opening the account (as with most accounts).

Before Principality announced the increase, ING was at the top of the table, offering one of the best rates available at 2.75% on its ING Direct Savings Account, with the Sainsbury’s Internet Saver close behind at 2.60%.