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Top Savings Accounts 3% easy access, up to 3.5% fixed

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Where to start saving

Savings starting line

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 in a savings account?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...

The UK's best savings rates

Calculating a budgetThe 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
  • Fee: £2/month
  • 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 you need to pay in £500/month (equivalent to a pre-tax annual salary of at least £6,000) and have at least two direct debits going out of the account.

You'll also need to pay the £2/mth fee, though it 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.

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: 123 Acc (not whole bank)
(In credit)
Great Santander 76%
OK Santander 19%
Poor Santander 5%
Date: Aug 2013 | Voters:836
Customer service feedback

In our August 2013 poll, Santander's 123 account was the third best rated for service. The account's fairly new, so we split it out in this poll, but Santander's results have improved overall.

Britannia: 1.5% AER Four withdrawals. Apply online or in branch. Min £500.

Britannia
  • Rate: 1.5% AER, clean rate
  • Min deposit: £500
  • Max deposit: £1 million
  • Access: Branch, post, phone
  • Interest paid: Annually
  • Withdrawal restrictions: Poor. Four withdrawals
  • Safety: Shared £85,000 UK savings safety guarantee
Apply
1.5,500

The Select Access Saver from Britannia pays 1.5% AER but there's no short-term bonus, so be prepared to ditch and switch if it drops.

You'll need £500 to open the account, but the balance can drop to £1 afterwards. You're allowed to make four withdrawals a year - if you make any more the rate drops to 0.1%.

The account can be opened online or in Co-op and Britannia branches – all Britannia's branches are being rebranded under the Co-op name. To find your nearest branch, see Co-op’s website. You can access the account in branch, by phone or by post.

Britannia shares the £85,000 savings safety guarantee with the Co-op Bank and Smile. See more information about the Savings Safety rules.

Yorkshire BS: 1.4% AER Three withdrawals. Apply in branch or by post. Min £100.

Yorkshire BS
  • Rate: 1.4% AER, clean rate
  • Min deposit: £100
  • Max deposit: £2 million
  • Access: Branch or post
  • Interest paid: Annually or Monthly
  • Withdrawal restrictions: Poor. Three withdrawals
  • Safety: Shared £85,000 UK savings safety guarantee
Apply
1.4,100

The Triple Access Saver (issue 3) from Yorkshire BS pays 1.4% AER, on balances from £100. It is a clean rate so prepare to ditch and switch when the rate drops.

The account can be opened and operated in branch or by post. You can make three withdrawals a year and interest is paid annually or monthly.

Yorkshire shares its £85,000 FSCS protection with Chelsea, Norwich & Peterborough and Barnsley building societies, plus ex-Egg Savings customers. 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

Ethical top pick: 1.4% AER

Both have limited withdrawals though

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

  • 1.4% AER - 12 withdrawals/year, postal access
    Ethical 13.5/20 Rating
    The PostSave Easy Access (2) from Coventry BS pays 1.4% on balances from £500, and allows 12 penalty-free withdrawals a year. Further withdrawals will be allowed, but you'll lose 30 days' interest for each.

    Coventry BS shares its £85,000 FSCS protection with Stroud & Swindon Building Society.
    Ethical Consumer score: 13.5 out of 20.
  • 1.4% AER - Three withdrawals/year, min £100
    Ethical 12.5/20 Rating
    The Triple Access Saver (issue 3) from Yorkshire BS pays 1.4% AER, on balances from £100. The account can be opened and operated in branch or by post and only allows three withdrawals a year.

    Yorkshire shares its £85,000 FSCS protection with Chelsea, Norwich & Peterborough and Barnsley building societies, plus ex-Egg Savings customers. See more information about the Savings Safety rules.
    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.

The dice don't have all the answers Is now the right time to fix savings?

In August 2013 the Bank of England boss, Mark Carney, announced that base rate won't move from its 0.5% low until unemployment drops under 7%. However, in later guidance in January 2014, he said this - in itself - wouldn't necessarily be a trigger to raise rates.

So it's probable that interest rates are unlikely to improve in the near future, which may make fixing more attractive for people who've avoided it in the past. As the top fixes beat easy access, if you can lock cash away, you can boost your rate.

Of course, if rates did unexpectedly skyrocket (and no one has a crystal ball - though Carney's warning is pretty strong) by fixing 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.

If savings safety status of banks change (eg, via mergers) it's harder to get at your cash

You may need to set up another account, in order to pay money in

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.

Shawbrook Shawbrook Bank 1.95% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 1.95% AER
  • Length of fixed deal: 1 year
  • Min deposit: £5,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Axis Bank Axis Bank 1.75% AER Apply by post or in branch. Min £10,000.

  • Product & link: Axis Bank
  • Rate: 1.75% AER
  • Length of fixed deal: 1 year
  • Min deposit: £10,000
  • Max deposit: £100,000
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply
18 Months

The best 18-month fixed rates

If you don't mind fixing for slightly longer than a year, Shawbrook’s 18 month account is a top pick, paying a higher rate than the one year options above.

Shawbrook Shawbrook Bank 2.05% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 2.05% AER
  • Length of fixed deal: 18 months
  • Min deposit: £5,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
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 chance there is that rates will rise while your cash is untouchable.

Close Brothers Close Brothers 2.4% AERApply by post. Min £10,000.

  • Product & link: Close Brothers
  • Rate: 2.4% AER
  • Length of fixed deal: 2 years
  • Min deposit: £10,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Shawbrook Shawbrook Bank 2.3% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 2.3% AER
  • Length of fixed deal: 2 years
  • Min deposit: £5,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
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. But 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.

ICICI ICICI Bank UK 2.7% AER Apply online or by phone. Min £1,000

  • Product & link ICICI Bank UK
  • Rate: 2.7% AER
  • Length of fixed deal: 3 years
  • Min deposit: £1,000
  • Max deposit: No maximum
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Close Brothers Close Brothers 2.7% AERApply by post. Min £10,000.

  • Product & link: Close Brothers
  • Rate: 2.7% 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. Plus you'll only get slightly more than 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 2.85% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 2.85% 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. If you want to lock money away for longer, these are the best rates on offer.

Shawbrook Shawbrook Bank 3.1% AER Apply online or by post. Min £5,000.

  • Product & linkShawbrook Bank
  • Rate: 3.1% AER
  • Length of fixed deal: 5 years
  • Min deposit: £5,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Skipton Skipton BS 3% AER Apply online. Min £500

  • Product & link Skipton BS E-Bond
  • Rate: 3% AER
  • Length of fixed deal: 5 years
  • Min deposit: £500
  • Max deposit: £1 million
  • Savings safety: Shared £85,000 UK protection
Full detailsApply
7+ Years

The best longer-term fixed rates

Be very careful going for these. The rates are higher than those for five years, and could help provide a fixed supplement to your income, but you're locking in for a long time. If rates rise even 2% during this time, these will no longer look to be a great investment.

first Save First Save 3.5% AER Apply Online. Min £1,000.

  • Product & link First Save
  • Rate: 3.5% AER
  • Length of fixed deal: To 31 Dec 2020
  • Min deposit: £1,000
  • Max deposit: £2 million
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

first trust Secure Trust Bank 3.4% AER Apply online. Min £1,000

  • Product & link Secure Trust Bank
  • Rate: 3.4% AER
  • Length of fixed deal: To 31 Mar 2021
  • Min deposit: £1,000
  • Max deposit £1 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. 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.

  • 1.5% AER fixed for one year
    Rating 13.5/20
    The Kent Reliance one-year fixed rate Bond pays 1.5% AER on balances over £1,000. You can apply online, by post or in branches.
    Ethical score: 13.5 out of 20.
  • 1.85% AER fixed for two years
    Rating 13.5/20
    The Kent Reliance two-year Fixed Rate Bond (issue 20) pays 1.85% AER, on balances over £1,000. You can apply online, by post or in branches.
    Ethical score: 13.5 out of 20.
  • 2.05% AER fixed for three years
    Rating 13/20
    The Skipton BS Fixed Rate E-Bond pays 2.05% AER for three years, with a minimum deposit of £500. You can apply online and interest can be paid monthly or annually.
    Ethical score: 13 out of 20.
  • 3% AER fixed for five years
    Rating 13/20
    The Skipton BS five-year Fixed Rate E-Bond pays 3% AER on balances over £500. You can apply online and interest can be paid monthly or annually.
    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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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

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