Shares were soaring again this week, taking the FTSE 100 index to within sight of a seven-year high. And yet, amidst the market’s strength, the bears continue to gambol. Investors, both professional and private, continue to fret about a bull market now well into its fifth year. On Monday, Standard Life said its savings & investment index had fallen for the second successive quarter. It is now back to the levels of the first half of 2006 when, as readers will recall, the market saw its last correction worthy of the name.

You might be forgiven for taking any attempt to gauge the confidence of investors and savers with a pinch of salt. However, many fund managers who are worth their salt, including Fidelity’s Anthony Bolton, Neil Woodford of Invesco Perpetual and Ken Murray of the Edinburgh-based Blue Planet Investment Management, have all expressed caution about the state of the stock market.

But do not despair. The same interest rates which have prompted at least part of the current jitters also provide a silver lining for nervous investors. Last week’s base rate rise means money now earns a rate of interest not seen since March 2001, which is excellent news for anyone wanting to protect their investments from any expected stock market squalls. If you believe it, the rise in the annual retail prices index to May was 4.3 per cent, so anyone in cash right now should be earning nearly 1.5 percentage points more than inflation.

The question is, how do you take advantage of these rates? Savings accounts which top the rate charts are often a snare. As Justin Modray of Bestinvest, the independent financial adviser, explains “‘Best-buy’ accounts are usually loss leaders, with the banks and building societies hoping to sell customers other more lucrative services and/or gradually reduce the rate over time to a more profitable level.”

One parking place that should be useful for lethargic investors seeking to shelter cash from the stock market is a money market fund. These don’t ever really compete with best-buy accounts, but they should always provide you with a rate which tracks base rates and beats the bank and building society average.

According to TrustNet, the funds data provider, Wesleyan Cash, which currently yields 5.66 per cent, has been consistently ahead of its average rival over the last five years. Other top performers include Prudential Maximum Income and M&G High Interest. But if you do decide to go for one of these funds, try and avoid any initial charges and be aware that other fees can absorb up to 0.75 per cent of your annual income.

Better, perhaps, to stick with the Icesave account offered by Iceland’s Landsbanki. According to Mr Modray, “not only does it offer an attractive 6.2 per cent gross (from 13 July), but the rate is guaranteed to exceed the Bank of England base rate by at least 0.25 per cent until 1 October 2009 and then at least match it until 1 October 2011.” Those are not bad terms, particularly for those of us who can only be intermittently bothered to check we are getting the best rates on our cash.

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