IT may have only eight branches, but Barnsley Building Society has big ambitions and last week it managed to knock the mighty Tesco off its perch with a new product to help hard-pressed savers.

On minimum £100 deposits, Barnsley’s one-year fixed-rate bond guarantees a gross 3.05 per cent, or 2.44 per cent net for basic-rate taxpayers, with a monthly income (3.01 per cent or 2.41 per cent respectively) if preferred.

Sarah Lawrence, Barnsley’s senior savings product manager, says: “As economists predict base rates will remain low well into 2011, our new bond is good for savers. Our new account offers security with a guaranteed great rate for the next year.”

Although Barnsley is a subsidiary of Yorkshire Building Society, its move has extra significance because it tops the Tesco fixed-rate bonds – at 2.95 per cent for one year and 3.5 per cent for two years – which have been high in the best-buy charts for weeks.

Tesco has also had great success with its internet account – an online easy access bonus account paying 2.6 per cent (including a 1.35 per cent first-year bonus) and is rarely bested on its financial products.

Darren Cook, from Moneyfacts, said: “Tesco is coming up with decent deals when the cost of financing from banks is being squeezed. It’s got a good foothold in the market and gives good value, which is good for consumers.”

David Black, a banking specialist at financial data analyst Defaqto, said: “Tesco is highly competitive in taking on the big boys.

“Currently, its market-leading products include unsecured loans (7.7 per cent typical APR on £7,500 to £14,999).

While Barnsley has stolen a lead on one-year bonds, Tesco is bested over two years only by Bank of Cyprus (3.6 per cent).”

Tesco insurance policies cover motors, homes, pets, travel, life insurance, over-50 plans, private health, dental, car breakdowns and are available in store, by phone and online.

How do they compare with the rest of the market?

Mike Powell, an insurance analyst at Defaqto, says: “Tesco policies are graded, so customers know exactly what they are getting.

“Its expensive, five-star home insurance scores well on our comparison charts, for instance, while customers obviously save money by buying cheaper three-star and onestar policies. There are two grades of both motor insurance and pet cover.”

Success in financial products clearly boosted Tesco’s profits in the past year. The supermarket company, which rattles up profits at the rate of £105 a second, has persuaded 400,000 people to open Tesco Bank accounts in the past 12 months.

Worldwide, there are 35 million holders of a Tesco Clubcard, which is also a Mastercard credit card, and £529m was returned to them in Clubcard vouchers last year.

Tesco’s intention to revamp the loyalty scheme before Christmas has led financial website Moneysavingexpert.

com to urge customers to spend all their current vouchers in the next six weeks. They can trade Tesco vouchers for rewards with other suppliers worth four times their value, but that falls to three times from December 6.