Now Rock is a gilt-edged opportunity

Now Rock is a gilt-edged opportunity

Lots of people - especially competitors - are railing at the government's nationalisation of Northern Rock. Others wiser than I have written acres of words about whether it was the right or wrong thing to do.

Personally I would rather see the bank nationalised (and perhaps the money eventually returned to us taxpayers) than allowing the likes of Richard Branson to snap it up at a rock-bottom price and make millions - but no doubt this is a naive attitude.

However, from a saver's point of view the decision has made Northern Rock look a very interesting proposition. It and National Savings & Investments are the only financial institutions in the UK to have a solid government guarantee. And Northern Rock's products are paying more attractive rates of interest at the moment. Take cash Isas - it is offering 6.1 per cent fixed until March 2009 or 2011, while NS&I is paying variable (which will go down with base-rate cuts) interest of 5.1 per cent on its Cash Isa and 5.8 per cent on its Direct Isa. And Northern Rock's Silver Savings Online is paying 6.49 per cent from deposits of £1 upwards. NS&I has nothing to compare with that.

Northern Rock passed on only 0.1 per cent of the last 0.25 per cent base rate cut to savers. It is, for obvious reasons, desperate to get money in, so its rates are likely to remain extremely competitive. It is now one of the two safest places to save in the country. Fill your boots.

guardian.co.uk.....continued below

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