Scottish Widows Bank receives an honourable mention in the Moneyfacts survey, along with the Coventry building society, for its consistent appearance in the top savings tables over the past three years since it was launched.

The bank, which has this month located to Scottish Widows' new headquarters at Port Hamilton in Edinburgh, claims to have a business plan and a cost base that enables it to run at a profit while keeping rates very competitive. In contrast with Standard Life Bank, which last week passed the #500m mark after only five months, Scottish Widows Bank has built #300m of deposits in three years and is taking a net #12m a month.

Managing director Rob Goldburn said: ''We have aimed at niche markets but we don't just dabble here and there. Everything we do is consistent with the core business of the group.''

The bank's average deposit is #14,000 and it does not get involved in cheque and direct debit transactions.

''We decided first to avoid making products complicated. It makes life easier for the provider and customers always know exactly what they are getting. Second, on pricing we have never really intended to be the highest but aimed to be consistently near the top.''

The industry view is that the supermarket banks have used high early rates to net huge volumes of customers at a loss, with a view to selling them other more profitable products later.

Goldburn commented: ''There is going to be a very competitive market when they come to cross-sell. We have 75 members of staff and try to grow through systems improvements rather than throwing in more people all the time. The supermarkets' processing costs are pretty high and by the time they have paid for that and given 6.5% to the depositor they will be looking at a pretty big negative margin.''