Sainsbury's Finance has launched an internet saver account with a variable rate of 2.9 per cent AER.
The rate is available to customers who make a minimum deposit is £1,000. Those exceeding the balance will also receive a bonus of 1,000 Nectar points which can be used for shopping discounts.
The rate will fall to 0.51 per cent AER if the investor makes more than three withdrawals a year or allows the account balance to drop below £1,000.
"The latest Moneyfacts findings suggested that traditional high street banks are falling behind in providing competitive savings rates," said head of savings at Sainsbury's Finance, Helen Cook.
"We believe this latest Internet Saver offer highlights our commitment to provide consistently attractive rates for our customers," she added.
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