Overseas banks have taken over the best buy tables offering the top three no-frills savings deals for the first time.

Heading the list is the First Save account from FBN, a subsidiary of the First Bank of Nigeria, with a rate of 6.5% on its easy-access online account.

It joins a string of top rates from banks in countries ranging from India, Turkey, Cyprus and Iceland to the Netherlands.

Although UK-based Alliance & Leicester also pays 6.5% on its Esaver account, it includes a 12-month bonus of 0.35 points, making its standard rate 6.15%.

Heritable Bank, which is owned by the Icelandic bank Landsbanki, offers the second-best standard rate at 6.46%, while the Indian outfit ICICI is in third place, paying 6.41% on Hisave.

Icesave, owned by Landsbanki, is not far behind with a rate of 6.3%, which comes with some attractive guarantees - it promises to beat Bank rate by at least 0.25 points until October 2009 and then match the rate for a further two years.

It is the first time that banks from outside Britain have topped the best buy lists compiled by the comparison firm Money-supermarket.com (see page 11).

All the banks are covered by Britain’s Financial Services Compensation Scheme (FSCS), under which deposits of up to £35,000 are guaranteed by the government if a financial institution were to go under.

Nevertheless, many savers will be reluctant to entrust their money to a little-known foreign bank – especially given the track record of ING.

The Dutch bank launched in a blaze of publicity in May 2003, promising a simple, fair, no-frills approach with its Direct Savings account. However, after initially paying a market-leading rate of 4.3% – 0.55 points above Bank Rate at the time – it failed to pass on base-rate rises last year. Its current rate of 5.15% is 0.35 points below Bank rate, although new customers get a rate of 5.7% for the first 12 months.

Analysts said there was no guarantee that First Bank would not pursue a similar strategy. First Bank of Nigeria was founded in 1894 by British shipping magnate Sir Alfred Jones and is now West Africa’s oldest and largest bank. It has been quoted on the Nigerian stock exchange since 1971.

Its UK division, FBN Bank, has operated in this country for five years, although the First Save account has been available only since July. Its managing director, Peter Hinson, said: “Traditionally, our target market has been the Nigerian community in Britain, but we’re expanding our business by offering good rates to a wider audience.” He insisted the high rates on offer were for the long term. Last week the bank issued a rate guarantee on First Save, promising to be 0.25 points above Bank rate until January 2010 and then matching it until January 2012.

However, not all analysts are so confident. Mark Durling of broker Brewin Dolphin said: “I would be wary of putting money into this account. Although it has a guarantee, Nigeria is an unstable country and any deposit is subject to the risks that poses.”

ICICI, which has 100,000 customers in Britain, also denied that it would lower its rates once it had acquired a greater share of the market.

Anubrata Biswas, for ICICI, said: “We are able to offer such high rates because the cost of our technology is one-tenth of the costs for banks in more developed countries.”

He also pointed out that the bank had 24m customers in India and was the second-largest bank in the sub-continent.

“This gives us an advantage in terms of operational scale as it brings down the cost of each single transaction,” he said.

First Bank, Heritable and ICICI have all signed up to the voluntary Banking Code, which ensures additional protection for consumers by outlining a code of conduct while offering an extra port of call to lodge complaints.

Under the code, a bank or building society must let customers know within 30 days of any change to its interest rates. It must also inform them individually if its rates move by more than 0.25 percentage points compared with Bank rate or by more than 0.5 percentage points within a given 12-month period.

Turkey’s Akbank, which has offered its AK savings account at 6.25% since August 2006, has not signed up – but is still covered by the FSCS.

“Although your money is still protected, you have to wonder why they choose not to sign up to the code,” said Kevin Mountford, savings expert at Money-supermarket.

ICICI subscribed to the code in October last year following criticism from consumer groups.

Sue Hannums of adviser AWD Chase de Vere said: “I would have no problem in recommending a bank that’s covered by the FSCS and the Banking Code. If you are worried, then don’t put anything more than the £35,000 into each account.”