Top Savings Accounts 3% easy access, up to 3% fixed

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Where to start saving

Not everyone should just grab the savings account with the best interest rates - often you can use spare cash more profitably, depending on your circumstances. Read the full Starting Saving guide to see where your money's best used.

If you've checked all of the above, and have decided you want somewhere safe to stow your cash, then you're in the right place...

A savings account is just a place to dunk an unlimited amount of unused cash, to earn a higher rate of interest.

Savings accounts have less functionality than normal day-to-day accounts offering neither cheque books nor, with a few exceptions, cash cards.

How safe are your savings?

Bank collapse was once easy to dismiss, then the credit crunch and global market turmoil hit. After the calamities that hit Northern Rock, Bradford & Bingley, Icesave and Kaupthing, every sensible saver should ask "is my money safe?".

The answer is simple. Provided the money is in a UK-regulated bank or building society account, it's protected under the Financial Services Compensation Scheme (FSCS) meaning...

Up to £85,000 per person, per financial institution is guaranteed.

How safe is your money?Sadly the exact rules about what counts as "UK-regulated", the links between institutions, and joint accounts make it more complex. For full info on the rules, see the detailed Are Your Savings Safe? guide.

For large savings, to keep it 100% safe, simply spread it in a number of accounts, not putting more than £85,000 in each. In fact, consider spreading money even if you've under £85,000, as if you needed to claim compensation you wouldn't have instant access to your cash.

This guide and best buys

It's impossible to pick "which bank is in trouble?" Even the great names of world banking like Goldman Sachs and Merrill Lynch have been in trouble. Therefore our stance is to not try to judge that, but suggest you rely on the UK savings guarantee. So we report all top rates regardless, but include any protection oddities.

What to watch with savings

While savings are the simplest of products, providers still manage to throw a few wobblers into the mix. Click the links to read what to watch out for...

Ditch and switch after introductory 'bonus' rates
Beware 'suck, slap and flog' naming
Is your account easy access, instant access, no notice or notice?
Avoid penalties for exceeding withdrawal limits
Factor in the tax you'll pay on savings
Know exactly what interest rate you'll get - AER, gross...
What’s the top account for joint savings?

The UK's best savings rates

The best interest rate savings accounts currently available are listed below. Yet if you've not used your tax-free allowance this year, first check out Top Cash ISAs as they are likely to pay you more interest.

The best interest rate accounts

All these deals are variable rate, so you need to monitor them to ensure the rate doesn't drop (switch away if it does). Don't just plump for the highest rate, read the pros and cons then pick one that suits.

Unless stated, all have full protection under the £85,000 per person, per institution rules. Though do check how institutions are linked along with the other notes in the Safe Savings guide.

Easy access

Santander 3% AER - in a CURRENT accountOn £3k-£20k balance. £2/mth fee, plus must pay-in £500/mth

Santander
  • Rate: 3% AER between £3k-£20k, 2% over £2k, 1% AER over £1k
  • Min deposit: £500 per month
  • Max deposit: N/A
  • Access: Online
  • Interest paid: Monthly
  • Withdrawal restrictions: Unlimited withdrawals - it is a current account
  • Safety: Shared £85,000 UK protection.
Apply*
3,3000

Now, this is a bit bizarre! The Santander 123* current account is actually the top paying easy-access savings account. If you've between £3,000 and £20,000 in it, you get 3% AER on the whole amount - then if the balance drops, so does the rate.

The rub is, you need to operate it like a normal current account. This means switching to it, and paying in £500/month (equivalent to a pre-tax annual salary of at least £6,000). There is a £2/mth fee, though it also pays a nice 1%-3% cashback on bills such as council tax, phones and energy, which should easily cover that - many make £10/mth or more on top.

If you've less than £2,500 to save, Nationwide's FlexDirect* account pays 5% AER in-credit interest up to that limit - see if it's right for you.

For full details of how the cashback works, overdraft costs and how this compares to other current accounts, read our full Best Bank Accounts guide.

Customer services poll
(In credit)
Great Santander 63%
OK Santander 28%
Poor Santander 9%
Date: Feb 2013 | Voters: 484
Customer service feedback

In our February 2013 poll, Santander's 123 account was one of the best rated, with 63% saying they got great service. The account's fairly new, so we split it out in this poll, but Santander's results have improved overall.

NS&I: 1.76% AER Unlimited withdrawals. Online, phone or post. Min £500.

NS&I
  • Rate: 1.76% AER, clean rate
  • Min deposit: £500
  • Max deposit: £1 million
  • Access: Online, phone or post
  • Interest paid: Monthly only
  • Withdrawal restrictions: Good. Unlimited withdrawals
  • Safety: 100% protected - fully government backed
Apply
1.76,500

The Income Bond from NS&I pays 1.76% AER on balances over £500 and it allows unlimited withdrawals

Interest is only paid monthly and it allows unlimited withdrawals. The account can be accessed and applied for online, by post or by phone.

NS&I is the only savings provider fully backed by the UK Government, so all money you save in it is protected. See more information about the Savings Safety rules.

Investec: 1.75% AERUnlimited withdrawals. Online. Min £25,000.

Investec
  • Rate: 1.75% AER
  • Min deposit: £25,000
  • Max deposit: £250,000
  • Access: Online only
  • Interest paid: Monthly
  • Withdrawal restrictions: Good. Unlimited withdrawals.
  • Safety: Full £85,000 UK protection
Apply
1.75,25000

The E-asy Access account from Investec pays 1.75% AER, with no bonus, on balances over £25,000 (max £250k). Keep an eye on the rate, and ditch and switch to another account if it drops.

The account has no minimum balance, but if it drops below £25,000 then you will only earn 0.5% on your savings. If you've less to save, try NS&I above, or see the spreading cash section for other options.

It is an online-only account and interest is paid monthly.

Investec has the full £85,000 savings safety guarantee. See more information about the Savings Safety rules.

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Specialised alternatives

Spreading cash for safety The best interest rate accounts if you need to spread savings

As explained in the Savings Safety guide, you're protected up to £85,000 per person per financial institution. If you want max safety on bigger amounts, you must spread cash wider.

The following are the next top payers in the market (or use 100%-protected savings accounts, at a lower rate).

100% protected savings For more than £85,000 in one place.

If you've got more than the protected £85,000, and the safety factor worries you, plus you've decided that spreading around multiple accounts isn't for you (see above), there are a few ways to get a 100% guarantee on savings. But you will miss out on the rates shown above.

Top cash machine access savings Some accounts provide an ATM cash card

The easy way to assure yourself 24-hour access to your cash is to get a savings account that gives you a cash machine card and allows free withdrawals from any Link machine.

Fancy looking locally?

All the rates above are available to anyone. However some small building societies occasionally offer special rates to people who live in the local area, or to existing members. It's always worth checking yours.

Occasionally cashback websites may give you a sign-up bonus when you open an account, so check 'em too.

Top ethical easy access savings

Ethical savings accounts - where providers behave ethically in terms of the environment, human rights and more - have jumped in popularity. Our main focus always is telling you the top savings rates, but to match demand we've worked with Ethical Consumer to list the top-paying accounts that also rate highly on their ethics.

EthicalConsumerScale

Ultra-ethical 1.5% AER (but no UK protection)

Or UK protected 1.7%

See the graph on the right for what Ethical Consumer's ratings mean.

  • 1.5% - most ethical but NO UK PROTECTION.
    Ethical 15/20 Rating
    Triodos Bank’s Online Saver Plus is the highest-rated ethical account with a good interest rate, 1.5% AER (including a fixed 0.5%, 12-month bonus) and allows three penalty-free withdrawals per year (min £1).

    However, it DOES NOT have UK savings protection - if it went bust, you'd be reliant on the Dutch compensation scheme for your cash. Read more: Are Your Savings Safe? Ethical Consumer score: 15 out of 20.
  • 1.7% AER - highest-rated ethical account.
    Ethical 12.5/20 Rating
    The NetSaver Derbyshire is the highest rated ethical account with a good interest rate. The online-only account pays 1.7% AER on balances over £1,000, including a 1.2% bonus until June 2014 and allows unlimited. Derbyshire shares its £85,000 UK savings safety guarantee with Nationwide, Cheshire and Dunfermline Building Societies. Ethical Consumer score: 12.5 out of 20.

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Fixed rate savings

Most savings accounts are variable, meaning the rate can change both with the Bank of England's base rate and as providers change their competitive stance - so to keep earning well you need to actively monitor your accounts. Yet there is an alternative...

Fixed rate savings give a guaranteed rate for a set period, but you can't take your money out during that time.

Therefore, they're only suitable for those who are happy to lock cash away for the entire term.

However, this means you can bag some decent rates, with banks after your cash for longer, as with fixed rates they get surety that you won't want it back until a defined time, thus allowing them to plan their lending strategies better.

How long to fix for?

The longer you fix for, the more you are RISKING the fact that an unpredictable future means this could be a bad choice.

If interest rates were to increase rapidly, you would've lost the flexibility to ditch and switch to a better payer, so it's important to go into fixed rate savings with your eyes open.

Another thing to consider is if the savings safety status of the institution changes, it'd be more difficult to get your cash out - though in the past, some merged banks have allowed special dispensation for these balances.

Some fixed accounts require you to set up a 'feeder' account, normally a non-fixed savings account, in order to get the money in. If that's the case, it's often speedier to do it at a bank you already have an account with.

Top Fixed Rate Savings

The standard current best buys are so low you should beware locking in for too long, or you'll be stuck if things bounce back.

1 Year

The best one year fixed rates

If you can spare access to your cash for a year, you can benefit from some higher rates.

Principality Principality 2% AER Apply online, by post or in branches. Min £500.

  • Product & link: Principality
  • Rate: 2% AER
  • Length of fixed deal: 1 year
  • Min deposit: £500
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Saffron BS Saffron BS 2% AER Apply by post or in branches. Min £500.

  • Product & link: Saffron BS
  • Rate: 2% AER
  • Length of fixed deal: 1 year
  • Min deposit: £500
  • Max deposit: £1 million
  • Savings safety: Full £85,000 FSCS protection

Early closure allowed, subject to a 180-day interest penalty on the amount withdrawn.

Full detailsApply
2 Years

The best two year fixed rates

Rates are higher in a two year account but always remember, the longer you lock cash away for, the more of a chance there is that rates will rise while your cash is untouchable.

Close Brothers Close Brothers 2.3% AEROnline or by post. Min £10,000.

  • Product & link: Close Brothers Fixed Term Rate
  • Rate: 2.3% AER
  • Length of fixed deal: 2 years
  • Min deposit: £10,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Bank of Cyprus Bank of Cyprus 2.25% AER Apply online or by phone or post. Min £1,000.

  • Product & linkBank of Cyprus UK
  • Rate: 2.25% AER
  • Length of fixed deal: 2 years
  • Min deposit: £1,000
  • Max deposit: £1 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

IBB Islamic Bank of Britain 2.63% AER Online, phone or branch. Min £1,000

  • Product & link Islamic Bank of Britain
  • Rate: 2.63% AER
  • Length of fixed deal: 2 years
  • Min deposit: £1,000
  • Max deposit £100,000
  • Savings safety: Full £85,000 FSCS protection

The highest two year rate is from Islamic Bank of Britain. The bank is Sharia'a (Islamic law) compliant, so all interest is banned. Instead, it offers an 'expected profit rate' of 2.6% per year when you save at least £1,000 (which compounds to 2.63%). This ISN'T exactly the same as interest, and there's a chance it may pay less, so please click for all the details.

Full detailsApply

3 Years

The best three year fixed rates

If you're happy locking your cash away for longer, you can get more in a three year account. However if interest rates recover between now and the end of the fixed term, you could lose out so make sure you're prepared to take the gamble.

Vanquis Vanquis Bank 2.51% AER Apply online or by phone. Min £1,000.

  • Product & linkVanquis Bank
  • Rate: 2.51% AER
  • Length of fixed deal: 3 years
  • Min deposit: £1,000
  • Max deposit: £250,000
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Shawbrook Shawbrook Bank 2.5% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 2.5% AER
  • Length of fixed deal: 3 years
  • Min deposit: £5,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Close Brothers Close Brothers 2.5% AEROnline or by post. Min £10,000.

  • Product & link: Close Brothers Fixed Term Rate
  • Rate: 2.5% AER
  • Length of fixed deal: 3 years
  • Min deposit: £10,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply
4 Years

The best four year fixed rates

Decent choices are limited when saving for four years, and you'll get only slightly less in a three year account so you may want to consider a shorter fix. The longer you fix for, the more you risk rates increasing in the meantime.

Shawbrook Shawbrook Bank 2.55% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 2.55% AER
  • Length of fixed deal: 4 years
  • Min deposit: £5,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply
5 Years

The best five year fixed rates

Fixing for longer usually boosts rates further, but at the moment rates are similar to three year fixes. If you want to lock money away for longer, these are the best rates on offer.

Virgin Virgin Money 3% AER Apply online. Min £1.

  • Product & linkVirgin Money
  • Rate: 3% AER
  • Length of fixed deal: to 20 May 2018
  • Min deposit: £1
  • Max deposit: £1 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

First Save FirstSave 2.9% AER Apply online. Min £1,000

  • Product & link First Save Fixed Rate Bond
  • Rate: 2.9% AER
  • Length of fixed deal: 5 years
  • Min deposit: £1,000
  • Max deposit £2 million
  • Savings safety: Full £85,000 UK protection
Full detailsApply

Shawbrook Shawbrook Bank 2.75% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 2.75% AER
  • Length of fixed deal: 5 years
  • Min deposit: £5,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

For other lengths of fixed rates, and a full list of fixed rate savings accounts use the MoneySupermarket* and Moneyfacts comparisons, in conjunction with the Savings Safety guide to examine the protection for any accounts. However, with these it's crucial you double check the rates on the banks' own websites before applying, as the comparison tables are NOT continually updated.

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Top ethical fixed savings

Ethical savings accounts - where providers behave ethically in terms of the environment, human rights and more - have jumped in popularity. Our main focus is always telling you the top savings rates, but to match demand we've worked with Ethical Consumer to list the top-paying accounts that also rate highly on their ethics.

EthicalConsumerScale

Earn up to 3% AER fixed in an ethical bank

All the accounts below have the full £85,000 UK guarantee. See the graph on the right for what Ethical Consumer's ratings mean.

  • 2% AER fixed for one year
    Rating 13.5/20
    The Principality BS one-year Fixed Rate Bond (issue 225) pays 2% AER on balances over £500.
    Ethical Consumer score: 13.5 out of 20.
  • 2.1% AER fixed for two years
    Rating 13/20
    The Kent Reliance two-year Fixed Rate Bond (issue 13) pays 2.1% AER with a min deposit of £1,000. Ethical score: 13 out of 20.
  • 2.2% AER fixed for three years
    Rating 13/20
    The Yorkshire BS three-year Fixed Rate e-Bond pays 2.2% AER, less than the two year account above so you may want to opt for a shorter fix. The min deposit is £1,000. Ethical score: 13 out of 20.
  • 2.5% AER fixed for four years
    Rating 13/20
    The Kent Reliance four-year Fixed Rate Bond (issue 7) pays 2.5% AER on balances over £500. Plus, as an added bonus, it's supporting Great Ormond Street Hospital, pledging 0.25% of the average monthly balance. Ethical score: 13 out of 20.

Do you live off savings interest?

When using fixed rate savings, you won't usually get paid monthly interest. Therefore many who rely on interest earned from savings as an income stream don't fix, even though they're paying higher rates. Yet there's a workaround.

Here's an example (ignoring tax for ease of explanation)...

You've £100,000, and can get 5% in a year-long fixed account and 3% in an instant access account. You'd like roughly £5,000 of interest from these savings to supplement your income.

Put £95,000 in the fixed account, and £5,000 in the instant access. Then spend the instant access money over the year, knowing the £4,750 interest earned in the fixed account will make up for it. Then you're effectively getting the high rate and spending the interest.

This way you can grab the higher fixed rate accounts, but retain access to enough cash in the meantime. Remember though, if you might need to get at the whole lump within the fixed term, this trick won't help and fixed rates may not be for you.

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Guaranteed good rates

An alternative to fixing is to get an account that gives you a rate guarantee for a certain period if you lock your cash away - that way you know exactly what the deal will be. There are a few different types; accounts that track base rate, or pay the average of the top savings accounts. Both of these are listed below. Or there's those linked to inflation (see Inflation-Linked Savings).


Investec: 2% AER. Min £25,000 deposit3 mths notice to withdraw. Pays average of top 10 accounts.

Investec
  • Rate: 2% AER variable
  • Min Deposit: £25,000
  • Max Deposit: £100,000
  • Access: Online, post or phone.
  • Interest paid: Annually or monthly
  • Withdrawal restrictions: Three months' notice must be given.
  • Safety: Full £85,000 UK protection
Apply
2,25000

The High 10 account from Investec pays the average of the 10 highest savings rates in the market, currently 2% AER (it's decided by price comparison site Moneyfacts, and updated every Tuesday).

The catches are that you need to save over £25,000 and give three months' notice to withdraw any money, so only open this if you don't need instant access to your cash. It may also be worth you comparing with the fixed savings accounts section.

There's also a High 5 (issue 2) version of the account which pays the average of the highest 5 savings rates, currently 2.08% AER. However, you need to give six months' notice to withdraw from it. Again, the minimum deposit is £25,000.

Investec has the full £85,000 FSCS protection. See more information about the Savings Safety rules.

Top small business savings accounts

If you have a business current account, the chances are it pays roughly 0% interest. So any businesses that have cash stored, even just to pay the taxman, are missing out on interest.

Who needs a business account?

There are two main types of small business structure; whether this works for you depends on yours.

  • Sole traders

    While you can open a business account, there's little point. Normal savings accounts pay far higher rates, so you would be better off opening an account in your own name and putting your business's cash in there.
  • Limited companies.

    This is the prime reason for small business accounts. For limited company business owners to move money into their own name requires a form of payment from the company to the individual. which will trigger a tax liability. Therefore business savings accounts are a way of earning interest on money in the company's name.

Savings safety

If you have a company with turnover under a million pounds, money in the bank has the same £85,000 per person (company) UK Savings Safety protection as private individuals. However if you have larger turnover, you're not protected.

Many of the accounts are specifically for small businesses. If you're larger, then check there are no turnover restrictions before applying for an account.

For the current top rates, read the Small Business MoneySaving guide.

The Savings Calculator

Simply enter all the details, remembering to choose the level of tax you pay. For the most accurate answer use the AER (Annual Equivalent Rate), which should be listed on your statement. Obviously as most accounts' interest rates are variable, the calculations will change if the rate does, but it should give you a good idea.

The calculator assumes you put money in at the beginning of each month, so if this isn't how you do it, the answers will be ever-so-slightly out. If you don't make regular deposits but put lump sums in, figure out the monthly equivalent for a rough answer. Feel free to play with the results to see how it impacts your savings.

Savings Calculator

Pick your question...

How much do you already have? £

How much can you save a month? £

What's the interest rate? (before tax) %

How far ahead do you want to look? years and months time.

How much tax do you pay? No Tax Basic Rate Higher Rate
Additional





How inflation hits your savings

To really know how well your savings are doing, you have to look at it compared to the rate of inflation. Inflation is the measure of the rate at which prices increase, so if savings don't beat inflation after tax, they're losing you money.

Ensure your savings aren't losings...

A savings account that pays less than the rate of inflation is eroding your wealth. An example using simple numbers should help...

Imagine inflation is 5%

...things costing £1 this year will then cost £1.05 next year

You have £1 in a savings account at 2% interest after tax

...by next year it will have grown to £1.02

Therefore saving's reduced your spending power by 3p/pound

...it's a losings not a savings account.

Of course sometimes prices drop - as happened in 2009 - and you get negative inflation, known as deflation. This can sometimes be positive for savings - read about the impact of deflation on savings.


Glossary

Join in the Forum Discussion:
Top Savings Accounts

What the * means above

If a link has a * by it, that means it is an affiliated link and therefore it helps MoneySavingExpert stay free to use, as it is tracked to us. If you go through it, it can sometimes result in a payment to the site. It's worth noting this means the third party used may be named on any credit agreements.

You shouldn’t notice any difference and the link will never negatively impact the product. Plus the editorial line (the things we write) is NEVER impacted by these links. We aim to look at all available products. If it isn't possible to get an affiliate link for the top deal, it is still included in exactly the same way, just with a non-paying link. For more details, read How This Site Is Financed.

Duplicate links of the * links above for the sake of transparency, but this version doesn't help MoneySavingExpert.com: MoneySupermarket, Santander 123

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