Talk of the death of savings is overdone. UK base rate's at an historic low, but savings are fighing back. While the worst accounts pay 0.1%, bagging a top rate can earn you over 3% easy access, or a whopping 5% if you lock your cash away for 3 years.
This is a step-by-step guide to comparing and choosing the highest instant access and fixed rates, in safety, including daily updated best buys.
Where to start saving- Inflation & Deflation
- IMPORTANT: Savings safety
- Tricks to beware
- Best Buys
- Top Easy Access: 3.6% (min £10k) or 3.15% (min £1)
- Top Fixed Rates: 3.7% for 1 year
- Top Guaranteed Rate: 3.36% (min £25k)
- Top Business Savings: 2.9% for 1 year
- The Savings Calculator
- Related Articles/Discuss
Where to start saving
Don't simply dunk your cash in the top savings account; depending on your circumstances there are a number of things which massively improve the returns on your cash first. These are explained fully in the Starting Saving guide, but here's a brief summary...
Do you have any debts?
If you have higher interest rate debts, e.g. most credit cards and loans, don't save. Instead, first pay these off as their interest cost is likely to massively dwarf the interest earned from saving. To find out if this applies to you, read the Should I Repay Debts? guide.
Do you have a mortgage?
While not as clear cut as loans or cards, in many cases the effective return from reducing mortgage debt is better than that from saving; though it's important to keep some cash spare. For a full guide, including a special calculator to help, read the Should I Repay My Mortgage? guide.
Have you opened a cash ISA this year?
A cash ISA is effectively a tax-free savings account each adult can put up to £3,600 a year in. If you haven't opened one this tax year (April to April), then it's the first place to put your cash. For more read the full Compare Cash ISAs guide.
Are you putting money aside each month rather than a lump sum?
Regular savings accounts are a specific product which earns you higher interest if you can pay £10 - £500 in every month. For more details and the best buys read the full Regular Savings Accounts guide.
Are you willing to lock the cash away for twelve months (or more)?
Fixed rate savings accounts guarantee you a specific rate of interest, for a set period of time (most commonly for one year). If you think you may need to get your hands on the money, then don't fix. However if you can sacrifice access for a while, then with savings rates likely to fall, fixed rates are a good way to ensure a decent interest rate. Read the Fixed Rate Savings section.
If you've done all of the above, and want somewhere safe to stow your cash, then you're in the right place...
A savings account is a place to dunk an unlimited amount of unused cash, to earn a higher rate of interest.
The difference between savings accounts and normal day to day bank accounts is they've less functionality, offering neither cheque books nor, with a few exceptions, cash cards.
What about inflation or deflation?
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 10%
... things costing £1 this year will then cost £1.10 next year
You have £1 in a savings account at 5% interest
... by next year it will have grown to £1.05
Therefore keeping cash in there has reduced your spending power
... it's a losings not a savings account.
Are you a loser? Check if your account pays less than inflation. View the full list.
The Losing Account List.
All the accounts listed below are losings accounts. That means that if you take inflation into account, put money in them and your savings will shrink.
The standard measure of inflation is roughly 2%, but tax needs to be paid on any interest, so to beat inflation a basic rate taxpayer needs to earn 2.5% interest and a higher rate taxpayer 3.33% interest.
The List of Losings Accounts - Rates do change, but accounts listed here are likely to stay losers
| Account Provider | Account Name | Untaxed Interest rate % (AER) | % Rate after basic rate tax | % Rate after higher rate tax |
| Abbey | Postal Account (1) | 2.75% | 2.2% | 1.65% |
| Abbey | Flexible Saver (3) | 3.05 – 3.25% | 2.44 – 2.6% | 1.83 – 1.95% |
| Alliance & Leicester | EasySaver | 2.6 - 3.15% | 2.08-2.52% | 1.56-1.89% |
| Alliance & Leicester | Instant Access | 0 – 0.75% | 0 – 0.6% | 0 – 0.45% |
| Bank of Cyprus | Instant Access | 1 – 2.5% | 0.8 – 2% | 0.6 – 1.5% |
| Bank of Cyprus | 45 Day Notice (4) | 2% | 1.6% | 1.2% |
| Bank of Ireland | Card Saver | 2.5% | 2% | 1.5% |
| Bank of Scotland | Instant Access (1) | 1.75% | 1.4% | 1.05% |
| Barclays | Easy Saver | 2.96% | 2.37% | 1.78% |
| Barclays | Bonus Saver (B) | 2.05 – 2.55% | 1.64 – 2.04% | 1.23 – 1.53% |
| Barnsley BS | Falcon Instant | 0.75 – 1.15% | 0.6 – 0.92% | 0.45 – 0.69% |
| Barnsley BS | Millers / Reds / Spireite / Tigers / Wildcat | 2.8% | 2.24% | 1.68% |
| Barnsley BS | Falcon 60 | 1.85 – 3.1% | 1.48 – 2.48% | 1.11 – 1.86% |
| Barnsley BS | Falcon 120 (5) | 3% | 2.4% | 1.8% |
| Bath BS | Lifestyle (6) | 0.65 – 3.1% | 0.52 – 2.48% | 0.39 – 1.86% |
| Birmingham Midshires | Postal Easy Access (5) | 1.46 – 3.11% | 1.17 – 2.49% | 0.88 – 1.87% |
| Bradford & Bingley | First Choice (C) | 0.85 – 1% | 0.68 – 0.8% | 0.51 – 0.6% |
| Britannia | Football Affinity Accounts (1) | 2.05 – 2.25% | 1.64 – 1.8% | 1.23 – 1.35% |
| Britannia | Flexible Saver | 1 – 1.85% | 0.8 – 1.48% | 0.6 – 1.11% |
| Britannia | Premium Saver (5) | 2.7 – 3% | 2.16 – 2.4% | 1.62 -1.8% |
| Britannia | Members Bond (5) | 3.05% | 2.44% | 1.83% |
| Buckinghamshire BS | Added Advantage (3) | 0.5 – 2.45% | 0.4 – 1.96% | 0.3 – 1.47% |
| Buckinghamshire BS | Chiltern Gold (5) | 2.95 – 3.15% | 2.36 – 2.52% | 1.77 – 1.89% |
| Cambridge BS | Instant Sapphire | 1.3 – 2.31% | 1.04 – 1.84% | 0.78 – 1.39% |
| Cambridge BS/ | Hallmark (3) | 2.82 – 3.02% | 2.26 – 2.42% | 1.69 – 1.81% |
| Chelsea BS | Instant Option | 1.25 – 2% | 1-1.6% | 0.75 - 1.2% |
| Cheltenham & Gloucester | Branch 10 (7) | 1.1% | 0.88% | 0.66% |
| Cheltenham & Gloucester | Direct Transfer (8) | 3.1 – 3.25% | 2.48 – 2.6% | 1.86 – 1.95% |
| Cheltenham & Gloucester | Gold | 1.1 – 1.25% | 0.88– 1% | 0.66 – 0.75% |
| Cheltenham & Gloucester | The London | 1.3 – 2.95% | 1.04 – 2.36% | 0.78 – 1.77% |
| Chesham BS | Bonus Saver (A) | 0.61 – 0.86% | 0.49 – 0.69% | 0.37 – 0.52% |
| Chesham BS | Shire Bond (5) | 1.1 – 3.05% | 0.88 – 2.44% | 0.66 – 1.83% |
| Chesham BS | Flexi 30 | 0.7 – 2.78% | 0.56 – 2.22% | 0.42 – 1.67% |
| Cheshire BS | Affinity Accounts (2) | 2.35 – 2.8% | 1.88 – 2.24% | 1.41 – 1.68% |
| Cheshire BS | Easy Saver (2) | 2.35 – 3.15% | 1.88 – 2.52% | 1.41 – 1.89% |
| Cheshire BS | Premium Access | 0.75 – 0.95% | 0.6 – 0.76% | 0.45 – 0.57% |
| Cheshire BS | Silkmen Saver (1) | 2.85 – 2.95% | 2.28 – 2.36% | 1.71 – 1.77% |
| Chorley & District BS | Chorleian Share | 1.35 – 2.25% | 1.08 – 1.8% | 0.81 – 1.35% |
| Chorley & District BS | Instant Rovers (5) | 2.05 – 2.85% | 1.64 – 2.28% | 1.23 – 1.71% |
| Chorley & District BS | Lancastrian Share | 1.65 – 3.15% | 1.32 – 2.52% | 0.99 – 1.89% |
| Chorley & District BS | St. Catherines Notice (5) | 2 - 2.9% | 1.6 – 2.32% | 1.2 – 1.74% |
| Chorley & District BS | Fortress Share (2) | 2.95 – 3.15% | 2.36 – 2.52% | 1.77 – 1.89% |
| Citibank | Instant Access | 0.35 – 2.38% | 0.28 – 1.9% | 0.21 – 1.43% |
| Citibank | 60 Day Direct (1) | 2.02% | 1.61% | 1.21% |
| City of Derry BS | Extra Instant Access | 1.5 – 3% | 1.2 – 2.4% | 0.9 – 1.8% |
| City of Derry BS | Access 30 (5) | 2.25 – 2.75% | 1.8 – 2.2% | 1.35 – 1.65% |
| City of Derry BS | 90 – Twenty (2) | 3% | 2.4% | 1.8% |
| Clydesdale Bank | Savings | 1 – 2.1% | 0.8 – 1.68% | 0.6 – 1.26% |
| Co-operative Bank | Cash Saver | 0.65 – 1.53% | 0.52 – 1.22% | 0.39 – 0.92% |
| Coventry BS | BranchSave Passbook | 1.15 – 1.3% | 0.92 – 1.04% | 0.69 – 0.78% |
| Coventry BS | BranchSave Statement | 3.1% | 2.48% | 1.86% |
| Coventry BS | PostSave Passbook | 3.15% | 2.52% | 1.89% |
| Cumberland BS | Cashcard | 1.7 – 3.05% | 1.36 – 2.44% | 1.02 – 1.83% |
| Cumberland BS | Cashcard Flexible | 1.25 – 3% | 1 – 2.4% | 0.75 – 1.8% |
| Cumberland BS | Affinity accounts (3) | 1.8 – 2.75% | 1.44 – 2.2% | 1.08 – 1.65% |
| Cumberland BS | Instant Savings | 1.7 – 3.05% | 1.36 – 2.44% | 1.02 – 1.83% |
| Cumberland BS | 30 day notice (2) | 2.8 – 3.1% | 2.24 - 2.48% | 1.68 – 1.86% |
| Darlington BS | Supporter accounts | 0.5 – 1.6% | 0.4 – 1.28% | 0.3 – 0.96% |
| Darlington BS | Instant Access | 0.1 – 3.05% | 0.08 – 2.44% | 0.06 – 1.83% |
| Darlington BS | Sentinel 90 (5) | 1.55 – 3% | 1.24 – 2.4% | 0.93 – 1.8% |
| Derbyshire BS | Crown Instant / Triple Gold | 1.15 – 2.3% | 0.92 – 1.84% | 0.69 – 1.38% |
| Derbyshire BS | Derby Rams / EMT and RCH (1) | 3% | 2.4% | 1.8% |
| Derbyshire BS | Derbyshire Cash Account | 0.5% | 0.4% | 0.3% |
| Derbyshire BS | Crown 90 (5) | 2.2 – 2.95% | 1.76 – 1.77% | 1.32 – 2.36% |
| Derbyshire BS | Crown Monthly (3) | 1.6 – 2.85% | 1.28 – 2.28% | 0.96 – 1.71% |
| Dudley BS | Extra Special | 0.2 – 2.4% | 0.16 – 1.92% | 0.12 – 1.44% |
| Dudley BS | Save and Sponsor (5) | 1.9 – 3.15% | 1.52 – 2.52% | 1.14 – 1.89% |
| Dudley BS | Special Savings (2) | 2.2% | 1.76% | 1.32% |
| Dunfermline BS | Direct Now Issue 2 (1) | 1.6 - 3.15% | 1.28 – 2.52% | 0.96 – 1.89% |
| Dunfermline BS | Gold | 1.1 – 3.05% | 0.88 – 2.44% | 0.66 – 1.83% |
| Dunfermline BS | Premium Shares (5) | 1.75 – 2.8% | 1.4 – 2.24% | 1.05 – 1.68% |
| Earl Shilton BS | Double Top | 0.75 – 2% | 0.6 – 1.6% | 0.45 – 1.2% |
| Earl Shilton BS | Capital 90 / Monthly Income (5) | 1.7 – 2.7% | 1.36 – 2.16% | 1.02 – 1.62% |
| Earl Shilton BS | Select 120 (5) | 1.95 – 2.95% | 1.56 – 2.36% | 1.17- 1.77% |
| Ecology BS | Eco Instant | 1.5 – 2.8% | 1.2 – 2.24% | 0.9 – 1.68% |
| Ecology BS | Eco-60 (2) | 2.55 – 3.05% | 2.04 – 2.44% | 1.53 – 1.83% |
| First Direct | Everyday Savings | 0.1 – 1.5% | 0.08 – 1.2% | 0.06 – 0.9% |
| First Direct | Savings (3) | 0.1 – 3% | 0.08 – 2.4% | 0.06 – 1.8% |
| First Trust | Select Savings | 0.7 – 2.65% | 0.56 – 2.12% | 0.42 – 1.59% |
| Furness BS | Instant Access | 1.35 – 2.85% | 1.08 - 2.28% | 0.81 - 1.71% |
| Furness BS | Capital (3) | 1.9 – 3% | 1.52 – 2.4% | 1.14 – 1.8% |
| Furness BS | Notice 90 (1) | 2.65 – 2.9% | 2.12 – 2.32% | 1.59 – 1.74% |
| HSBC | Instant Access | 1 - 1.75% | 0.8 – 1.4% | 0.6 – 1.05% |
| HSBC | Flexible Saver | 2.25 – 3% | 1.8 – 2.4% | 1.35 – 1.8% |
| HSBC | Morrisons (A) | 1% | 0.8% | 0.6% |
| HSBC | Premier Savings (3) | 3% | 2.4% | 1.8% |
| Halifax | Liquid Gold | 0.65 – 0.7% | 0.52 – 0.56% | 0.39 – 0.2% |
| Halifax | 60 Day Gold | 2.5 – 3.1% | 2 – 2.48% | 1.5 – 1.86% |
| Halifax | Instant Saver | 2.1 – 2.6% | 1.68 – 2.08% | 1.26 – 1.56% |
| Halifax | Saver Reward | 1.95 – 2.55% | 1.56 – 2.04% | 1.17 – 1.53% |
| Halifax | Bonus Gold (C) | 1.5 – 2.55% | 1.2 – 2.04% | 0.9 – 1.53% |
| Hanley Economic | Instant Access | 1.45 – 1.7% | 1.16 – 1.36% | 0.87 – 1.02% |
| Hanley Economic | Notice 28 | 1.75 – 2.8% | 1.4 – 2.24% | 0.84 – 1.68% |
| Hanley Economic | Postal 30 (2) | 3.1% | 2.48% | 1.86% |
| Hanley Economic | Growth Bond (2) | 2.65% | 2.12% | 1.59% |
| Harpenden BS | Escalator Shares | 1 – 2.65% | 0.8 – 2.12% | 0.6 – 1.59% |
| Hinckley & Rugby | Eagle Easy Access (5) | 2.7%> | 2.16% | 1.62% |
| Hinckley & Rugby | High Rise | 0.75 – 2.75% | 0.6 – 2.2% | 0.45 – 1.65% |
| Hinckley & Rugby | High Reward 6 (5) | 2.7% | 2.16% | 1.62% |
| Holmesdale BS | Easy Access (5) | 2.06 – 3.12% | 1.65 – 2.5% | 1.27 – 1.87% |
| Holmesdale BS | Special Shares (2) | 2.67% | 2.14% | 1.63% |
| Holmesdale BS | Benefit Shares (2) | 2.77% | 2.22% | 1.66% |
| Holmesdale BS | Monthly Income Shares (5) | 2.62 – 3.14% | 2.1 – 2.51% | 1.57 - 1.88% |
| Ipswich BS | Premier 30 (8) | 1.85 – 3% | 1.48 – 2.4% | 1.11 – 1.8% |
| Ipswich BS | Premier Monthly | 2.4 – 3.1% | 1.92 – 2.48% | 1.44 – 1.86% |
| Ipswich BS | Premier Instant | 1.25 – 2.52% | 1 – 2.02% | 0.8 – 1.51% |
| Julian Hodge Bank | Savings (3) | 2 – 3% | 1.6 – 2.4% | 1.2 – 1.8% |
| Julian Hodge Bank | Eight Day Notice (2) | 2.5 – 3% | 2 - 2.4% | 1.5 – 1.8% |
| Julian Hodge Bank | Extra High Interest (1) | 3% | 2.4% | 1.8% |
| Kent Reliance BS | Easy Access | 1 – 2.8% | 0.8 – 2.24% | 0.6 – 1.68% |
| Kent Reliance BS | Sportsaver | 1.1% | 0.88% | 0.66% |
| Kent Reliance BS | 90 Day Notice (5) | 1.75 – 2.75% | 1.4 – 2.2% | 1.05 – 1.65% |
| Laiki Bank | Instant Access | 0.9% | 0.72% | 0.54% |
| Lambeth BS | Easi-Save | 0.86 – 2.11% | 0.69 – 1.69% | 0.52 – 1.27% |
| Lambeth BS | Postal 30 (2) | 1.86 – 2.31% | 1.29 – 1.84% | 1.16 – 1.39% |
| Lambeth BS | Premium 30 | 1.11 – 2.36% | 0.89 – 1.89% | 0.67 – 1.42% |
| Lambeth BS | Olympos 60 (5) | 1.36 – 3.11% | 1.09 – 2.49% | 0.82 – 1.87% |
| Lambeth BS | Millenium 90 (4) | 2.76% | 2.21 % | 1.66% |
| Leeds BS | Leeds United / Donny Rovers / White Rose Saver (2) | 1.3 – 3.05% | 1.04 – 2.44% | 0.78 – 1.83% |
| Leeds BS | Premium Access (5) | 3.15% | 2.52% | 1.89% |
| Leeds BS | Capital 7 | 1.35 – 3% | 1.08 – 2.4% | 0.81 – 1.8% |
| Leek United BS | Pyramid Share | 0.6 – 2% | 0.48 – 1.6% | 0.36 – 1.2% |
| Leek United BS | Pyramid 90 (2) | 2.75% | 2.2% | 1.65% |
| Lloyds TSB | Exclusive Saver Gold (2) | 2.75 – 3% | 2.2 – 2.4% | 1.65 – 1.8% |
| Lloyds TSB | Exclusive Saver Platinum (4) | 3% | 2.4% | 1.8% |
| loyds TSB | Exclusive Saver Select (5) | 2.5 – 3% | 2 – 2.4% | 1.5 – 1.8% |
| Loughborough BS | Instant Access | 0.35 – 1.7% | 0.28 – 1.36% | 0.21 – 1.02% |
| Loughborough BS | Leicestershire C.C.C | 3% | 2.4% | 1.8% |
| Loughborough BS | 60 Day (8) | 1.95 – 3.2% | 1.56 – 2.56% | 1.17 – 1.92% |
| Manchester BS | Premier Instant | 1 – 2.95% | 0.8 – 2.36% | 0.6 – 1.77% |
| Mansfield BS | Prime Access | 0.25 – 2.5% | 0.2 – 2% | 0.15 – 1.5% |
| Mansfield BS | High Yield Option 90 (5) | 2.2 – 2.95% | 1.76 – 2.36% | 1.32 – 1.77% |
| Mansfield BS | Monthly Income (5) | 2.53 – 3.04% | 2.02 – 2.43% | 1.52 – 1.82% |
| Market Harborough BS | Instant Treasury | 1.05 - 2.55% | 0.84 – 2.04% | 0.63 – 1.53% |
| Market Harborough BS | Simply Direct (1) | 2.95% | 2.36% | 1.77% |
| Market Harborough BS | 30 Day Notice (3) | 1.6 – 3.1% | 1.28 – 2.48% | 0.96 – 1.86% |
| Market Harborough BS | 60 Day Notice (5) | 2.95% | 2.36% | 1.77% |
| Marsden BS | Rainbow Instant Access | 0.25 – 3% | 0.2 – 2.4% | 0.15 – 1.8% |
| Marsden BS | Rainbow 40 (5) | 2.75 – 3.25% | 2.2 – 2.6% | 1.65 – 1.95% |
| Melton Mowbray BS | Instant Access (2) | 1.82 – 2.92% | 1.46 – 2.34% | 1.09 – 1.75% |
| Mercantile BS | Moneymaker Plus | 0.6 – 2% | 0.48 – 1.6% | 0.36 – 1.2% |
| Mercantile BS | Premier 60 II (8) | 2.35 – 3.05% | 1.88 – 2.44% | 1.41 – 1.83% |
| Mercantile BS | Bonus 90 (D) | 1.4 – 2.55% | 1.12 – 2.04% | 0.84 – 1.53% |
| ercantile BS | High Yield Bond (5) | 2.45 – 2.95% | 1.96 – 2.36% | 1.47 -2.77% |
| Monmouthshire BS | Escalator Instant | 1 – 2.4% | 0.8 – 1.92% | 0.8 – 1.44% |
| Monmouthshire BS | Escalator Bonus (8) (C) | 1.6 – 2.85% | 1.28 – 2.28% | 0.96 – 1.71% |
| Monmouthshire BS | Escalator Bonus 90 (2) (C) | 2.35 – 3.1% | 1.8 – 2.48% | 1.41 – 1.86% |
| National Savings & Investments | Easy Access Savings (9) | 1.75% | 1.4% | 1.05% |
| National Savings & Investments | Investment (5) | 2.9 – 3.25% | 2.32 – 2.6% | 1.74 – 1.95% |
| Nationwide BS | Cashbuilder | 1.2 – 2.1% | 0.96 – 1.68% | 0.72 – 1.26% |
| Nationwide BS | Bonus 60 (E) | 2.6 – 3.1% | 2.08 – 2.48% | 1.56 – 1.86% |
| Nationwide BS | CapitalBuilder | 2.7 – 2.9% | 2.16 – 2.32% | 1.62 – 1.74% |
| Natwest | First Reserve | 1.3 – 1.45% | 1.04 – 1.16% | 0.78 – 0.87% |
| Natwest | Reward Reserve (B) | 0.1 – 3% | 0.08 – 2.4% | 0.06 – 1.8% |
| Newbury BS | Instant Premium | 2.9% | 2.32% | 1.74% |
| Newcastle BS | Nova Plus Issue 3 | 0.85 – 2.1% | 0.68 – 1.68% | 0.51 – 1.26% |
| Newcastle BS | Key / Nottm Forest / Save & Care accounts (3) | 1.35 – 2.9% | 1.08 – 2.32% | 0.81 – 1.74% |
| Newcastle BS | Nova Star 10 (2) | 1.4 – 1.75% | 1.12 – 1.4% | 0.84 – 1.05% |
| Northern Bank | Summit Savings | 1.35 – 2.95% | 1.08 – 2.36% | 0.81 – 1.77% |
| Northern Rock | Instant Access (E) | 0.25 – 2.15% | 0.2 – 1.72% | 0.15 – 1.29% |
| Norwich + Peterborough BS | Affinity Accounts (8) | 1.8 – 3.05% | 1.44 – 2.44% | 1.08 – 1.83% |
| Norwich + Peterborough BS | Easy Plus (C) | 1 – 2.75% | 0.8 – 2.2% | 0.6 – 1.65% |
| Nottingham BS | Access Bonus (G) | 1.02 – 1.7% | 0.82 – 1.36% | 0.61 – 1.02% |
| Nottingham BS | Access Plus | 1.32 – 2.2% | 1.06 – 1.76% | 0.79 – 1.32% |
| Nottingham BS | Nottingham Forest Saver (3) | 2.55 – 2.9% | 2.04 – 2.32% | 1.53 – 1.74% |
| Nottingham BS | Post Direct | 1.65 – 2.3% | 1.32 – 1.84% | 0.99 – 1.38% |
| Nottingham BS | Direct Reserve | 2.5 – 2.8% | 2 – 2.24% | 1.5 – 1.68% |
| Nottingham BS | Postal Plus (8) | 2.75 – 2.95% | 2.2 – 2.36% | 1.65 – 1.77% |
| Nottingham BS | Select (F) | 1.75 – 3% | 1.4 – 2.4% | 1.05 – 1.8% |
| Nottingham BS | Optima / Option 12 (5) | 2.4 – 2.8% | 1.92 – 2.24% | 1.44 – 1.68% |
| Portman BS | Instant Access (5) | 0.7 – 3.1% | 0.56 – 2.48% | 0.42 – 1.86% |
| Portman BS | Premier/ BSO Premier (2) | 2.9 – 3.25% | 2.32 – 2.6% | 1.74 – 1.95% |
| Principality BS | Instant Access Savings | 1.45 – 2.15% | 1.16 – 1.72% | 0.87 – 1.29% |
| Progressive BS | Investment Share | 1.45 – 2.25% | 1.16 – 1.8% | 0.87 – 1.35% |
| Progressive BS | Premium Saver (5) | 2.45 – 2.95% | 1.96 – 2.36% | 1.47 – 1.77% |
| Progressive BS | Premium 90 (5) | 2.5 – 2.95% | 2 – 2.36% | 1.5 – 1.77% |
| Prudential | High Interest Deposit | 0.5 – 1.4% | 0.4 – 1.12% | 0.3 – 0.84% |
| Prudential | 60 Day Notice (D) | 0.5 – 1.45% | 0.4 – 1.16% | 0.3 – 0.87% |
| RBS | Instant Access | 1.1 – 1.35% | 0.88 – 1.08% | 0.66 – 0.81% |
| RBS | Instant Savings Tracker (3) | 2 – 3.25% | 1.6 – 2.6% | 1.4 – 1.95% |
| RBS | Bonus 90 (3) (D) | 1.6 – 3.15% | 1.28 – 2.52% | 0.96 – 1.89% |
| Saffron Walden BS | Cashbuild | 1 – 2.2% | 0.8 – 1.76% | 0.6 – 1.32% |
| Scarborough BS | Standard | 0.5% | 0.4% | 0.3% |
| Scottish BS | Inverness Super Saver (5) | 2.25% | 1.8% | 1.35% |
| Scottish BS | Scotline | 1.25 – 2.75% | 1 – 2.2% | 0.75 – 1.65% |
| Scottish BS | Scotplus (5) | 2.25 – 2.85% | 1.8 – 2.28% | 1.35 – 1.71% |
| Scottish BS | Income Plus (3) | 2.45 – 3.1% | 1.96 – 2.48% | 1.47 – 1.86% |
| Secure Trust Bank | Deposit (1) | 2.25% | 1.8% | 1.35% |
| Shepshed BS | Instant Access | 1.4 – 2.4% | 1.12 – 1.92% | 0.84 – 1.44% |
| Shepshed BS | 90 Day Share (5) | 2.1 – 3.05% | 1.68 – 2.44% | 1.26 – 1.83% |
| Shepshed BS | Sapphire Share | 2.3 – 2.85% | 1.84 – 2.28% | 1.38 – 1.71% |
| Shepshed BS | 120 Day Share (2) | 2.75 – 3% | 2.2 – 2.4% | 1.65 – 1.8% |
| Shepshed BS | 2 Year Term Share (1) | 1.85 – 3.05% | 1.48 – 2.44% | 1.11 – 1.83% |
| Shepshed BS | 28 Day Share (5) | 1.45 – 2.95% | 1.16 – 2.36% | 0.87 – 1.77% |
| Skipton BS | High Street (10) | 1.65 – 3.1% | 1.32 – 2.48% | 0.99 – 1.86% |
| Skipton BS | Pilgrims Investment (10) | 1.8 – 2.8% | 1.44 – 2.24% | 1.08 – 1.68% |
| Skipton BS | Base Rate Tracker 3 | 3% | 2.4% | 1.8% |
| Stafford Railway BS | Pullman (2) | 1.5 – 2.55% | 1.2 – 2.04% | 0.9 – 1.53% |
| Stafford Railway BS | The World Land Trust | 3% | 2.4% | 1.8% |
| Stafford Railway BS | Black and White | 3% | 2.4% | 1.8% |
| Stafford Railway BS | Stafford Community | 3% | 2.4% | 1.8% |
| Stroud and Swindon BS | Bath Rugby / Branch Instant/ Cotswold Care / Forest Green / Willow Trust | 2.7% | 2.16% | 1.62% |
| Stroud and Swindon BS | Classic Gold | 1.1 – 1.8% | 0.88 – 1.44% | 0.66 – 1.08% |
| Stroud and Swindon BS | Direct Easy Access (3) | 2.35 – 3.05% | 1.88 – 2.44% | 1.41 – 1.83% |
| Stroud and Swindon BS | Direct 30 (1) | 2.9% | 2.32% | 1.74% |
| Stroud and Swindon BS | 40 Day (2) | 2.96% | 2.37% | 1.78% |
| Teachers BS | Minster Spire (1) | 3% | 2.4% | 1.8% |
| Tipton and Coseley BS | Community Saver | 2.5 – 3.15% | 2 – 2.52% | 1.65 – 1.89% |
| Tipton and Coseley BS | Instant Access | 1.15 – 2.4% | 0.92 – 1.92% | 0.69 – 1.44% |
| Tipton and Coseley BS | Hallmark 90 (1) | 2.90% | 2.32% | 1.74% |
| Tipton and Coseley BS | Investment Share (3) | 2.65 – 2.9% | 2.12 – 2.32% | 1.59 – 1.74% |
| Triodos Bank | Amnesty / Earth / Fairtrade / Medical Foundation / Charity / WDM Trust | 2.26 – 2.77% | 1.81 – 2.22% | 1.39 – 1.66% |
| Triodos Bank | Social Investor (8) | 2.26 – 3.02% | 1.81 – 2.42% | 1.39 – 1.81% |
| Ulster Bank | Easy Access (8) | 0.65 – 2.4% | 0.52 – 1.92% | 0.39 – 1.44% |
| Ulster Bank | U First (5) | 1 – 2.75% | 0.8 – 2.2% | 0.6 – 1.65% |
| Ulster Bank | Reserve 30 (8) | 1.25 – 2.8% | 1 – 2.24% | 0.75 – 1.68% |
| Ulster Bank | Reserve 90 (8) | 2.05 – 2.9% | 1.64 – 2.32% | 1.23 – 1.74% |
| Universal BS | Money Master | 0.6 – 1.25% | 0.48 – 1% | 0.36 – 0.75% |
| Universal BS | Money Spinner | 2 – 2.95% | 1.6 – 2.36% | 1.2 – 1.77% |
| Universal BS | 60 day | 0.65 – 2.95% | 0.52 – 2.36% | 0.39 – 1.77% |
| Universal BS | 80 Day (3) | 1.65 – 2.95% | 1.32 – 2.36% | 0.99 – 1.77% |
| Vernon BS | Instant Access | 0.75 – 1.4% | 0.6 – 1.12% | 0.4 – 0.84% |
| Vernon BS | Premium Plus (5) | 1.7 – 3.15% | 1.36 – 2.52% | 1.02 – 1.89% |
| Vernon BS | Premier Savings (2) | 2.85% | 2.28% | 1.71% |
| Wesleyan Savings | Classic (1) | 2.75 – 3.25% | 2.2 – 2.6% | 1.65 – 1.95% |
| West Bromwich BS | Affinity Accounts | 2 – 3% | 1.6 – 2.4% | 1.2 – 1.8% |
| West Bromwich BS | Bonus Saver (F) | 1.25% | 1% | 0.75% |
| West Bromwich BS | Direct Easy Access (5) | 1 – 3.05% | 0.8 – 2.44% | 0.6 – 1.83% |
| West Bromwich BS | Premium Share | 1 – 2% | 0.8 – 1.6% | 0.6 – 1.2% |
| Woolwich | Card Saver | 2.7 – 3.25% | 2.16 – 2.6% | 1.62 – 1.95% |
| Yorkshire Bank | Instant Savings (5) | 1.1 – 3% | 0.88 – 2.4% | 0.66 – 1.8% |
| Yorkshire BS | Blades / Bulls | 3.05% | 2.44% | 1.83% |
| Yorkshire BS | Cash Transactor | 0.6% | 0.48% | 0.36% |
| Yorkshire BS | Postal Saver (7) | 3% | 2.4% | 1.8% |
|
All savings under (1) £5k (2) £10k (3) £50k (4) £2.5k (5) £25k (6) £20k (7) £1k (8) £100k (9) £1k (10) £30k Dependent on withdrawals, a bonus is possible of (A) 1.75% (B) 1.5% (C) 0.5% (D) 1% (E) 0.75% (F) 2% (G) 50% extra interest Source: www.Moneyfacts.co.uk with additional research | ||||
What about when there's deflation?
Deflation is when the rate of inflation goes negative, meaning overall prices are lower than a year ago. This, or very low inflation, can actually be a boon to savers. To illustrate this, let's go to a high interest rate, high inflation time, like Summer 2008.
Imagine it's July 2008 (not too sunny then...). Inflation is at 5.0% and the best savings account pays 6.5% (ie. basic rate taxpayers get 5.2%). Sally Saver has £10,000 in her account, enough to buy a nominal 100 shopping trollies of food/shoes/washing machines.
Calculating over a year for ease, her savings would grow to £10,520. Yet inflation means the shopping basket has increased in price to £10,500. Thus Sally's spending power has only increased by £20; her real interest rate was just 0.2%.
Now flash forward to a time with full-on deflation.
Deflation has set in, with the inflation rate at minus 2%, plus savings rates have further slumped too, offering just 1.5% interest after tax. Here, after a year Sally’s ten grand’s only grown to £10,150, yet deflation means the shopping trollies now only cost £9,800.
This means she could buy them and have £350 left over, giving a real interest rate of roughly 3.5%. So even though her interest’s plummeted she’s actually better off.
This has remarkable consequences. Far too many have a concrete savings mindset that shouts "don’t spend your capital!" Yet in a deflationary environment that’s too rigid; anyone living off savings interest, would face huge cuts in their income, and not spending capital would actually be penalising yourself.
Personal rates of inflation do vary, yet if you’re experiencing deflation, and need to spend from your savings pot, you can do so without hurting your savings pile. Take the capital out at the rate of deflation, and you’re not losing anything as your purchasing power is retained.
How safe are your savings
Bank collapse was once easy to dismiss, then the credit crunch and global market turmoil hit. After the calamities hitting Northern Rock, Bradford & Bingley, Icesave and Kaupthing, and that's just the UK alone, every sensible saver should ask “is my money safe?
The answer is quite simple. Provided your money is in a UK regulated bank or building society account, it’s protected under the Financial Services Compensation Scheme (FSCS) and here’s the golden rule.
£50,000 per person, per financial institution is guaranteed.
Sadly this is the simple face of savings safety; the exact rules are more complex involving how different banks are registered and what counts as a financial institution. It should also be remembered, if you did need to claim compensation, that does mean it's likely you won't have access to that cash for a few months. For full info read the full Are Your Savings Safe? guide.
How to maximise safety.
The techniques you adopt depend on the amount of cash you want to save.
Over £50,000. For those with bigger savings, in the unlikely event a bank or building society went bust; don’t put more than £50,000 in any one institution; spread it around.
Very large amounts. For those with very large amounts of savings (for example a house sale) this could lead to lots of accounts, even if you've too much to stick to the £50,000 limit for each one, the general rule of not having all your eggs in one basket still works.
Less than £50,000. If you've less than £50,000 there's no problem in terms of protection. Yet if you were to have to claim compensation this takes time and meanwhile you wouldn't have access to your cash. Thus it's still worth considering spreading money across more than one institution.
For more info see the how to get 100% safety section of the savings safety guide.
This guide and best buys.
It's impossible to pick "which bank is in trouble?"; as well as the UK banks, we've seen great names of world banking like Goldman Sachs and Merrill Lynch in trouble.
Therefore the only solution for this site is that we'll report the top rates regardless, alongside explaining any 'protection oddities'. So far, world governments have reacted to protect their banks and no savers have lost money, and it's likely (though not certain) that will continue.
What to watch with savings
While savings are the simplest of products, providers have still managed to throw a few wobblers into the mix. There are a number of things to watch for...
Introductory ‘bonus' rates.
These are temporary interest hikes to attract new customers. For active consumers, as you can shift the cash to a better payer as soon as the bonus ends, it's no problem. However, easy-life seekers should avoid them.
Suck, slap and flog naming.
Some banks suck you in with a high rate, then later slap the rate down, and try to flog another similarly named account so you think you're still earning decent interest. Always know your account's exact name.
Withdrawal limits or penalties.
Some accounts limit the number of withdrawals you make a year. Others will not pay interest in any month a withdrawal is made. This can have a massive impact, for example you withdraw £100 but lose interest on all the £100,000 in your account for the whole month.
Quoting different interest.
Banks quote one of two different interest rates. The Gross rate is the flat amount paid; while the Annual Equivalent Rate (AER) takes into account interest compounded over the year. Check which rate you're being quoted and compare like with like. For a detailed explanation read about the difference between AER & Gross interest.
Also remember interest rates are usually quoted without tax, but for basic rate taxpayers 20% of the interest earned goes to the taxman; for higher rate taxpayers it's 40%.
BEST BUYS: The UK's Top Rate Savings
All the following accounts are either instant access allowing immediate cash withdrawal via a branch; or no-notice where, as it's an internet/phone account, in practice it takes a few days to get the cash in your hands. Use the Savings Calculator to see how much you’ll get. They also tend to be no-frills, so the rates are good but customer service may be limited.
There are two ways to beat these rates, though each have drawbacks...
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Regular Savers. You can earn up to 5% AER, fixed for a year, by using regular savers. These let you save up to £250 - £500/month, though you can't put large lump sums in one. Also, the money only moves slowly into the account, affecting how much interest you'll earn.
For the top accounts and how to use them best, read Regular Savings Accounts.
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Fixed Rate Accounts. If you're willing to lock cash away without access to it for a year or more, you may be able to boost your rate with a Fixed Savings Account.
It's also worth noting, sometimes you can get extra cashback signing up via special websites, see top cashback sites for a full explanation and how to find which sites pay most.
Unless stated, all the accounts have full protection under the £50,000 per person, per institution rules. Though do check how institutions are linked and other notes in the safe savings guide.
The top paying accounts...
Finding an account that is totally 'clean' i.e. plays no tricks like introductory bonuses and withdrawal penalties, and still gives a top rate is getting harder. You can also up the rate on offer, or tweak the conditions, if you are saving more, so it's crucial you read the pros and cons and pick the product that suits you best.
- Top Easy Access: 3.6% with bonus (min £10,000)
Ulster Bank 3.6% inc 1% bonus, complete access to cash, online.
The Ulster Bank's Pathway account pays new customers 3.6%. This includes a six month fixed 1% bonus, so it'll drop after that, though if the rate stays as now, 2.6% is still decent if not table topping (see below to compare).
Drop below the minimum £10,000 and the rate plummets to a miserable 0.01%, so withdraw immediately. The maximum balance is £1 million.
Ulster Bank is part of the Natwest & RBS group, but as they are separately UK registered with the FSA, you get £50,000 of UK FSCS protection with each bank.
Quick Stats: Rate: 3.6% variable, inc fixed 1% bonus. Min. Deposit: £10,000. Access: Online/Phone. Withdrawal restrictions: None - Top Easy Access: 3.15% includes bonus (min. £1)
Birmingham Midshires 3.15% AER inc 2.65% bonus, complete access to cash, phone only.
The top rate available with just £1 is Birmingham Midshires'* Telephone Extra paying 3.15% AER including a fixed 2.65% bonus which lasts twelve months. After a year, the rate drops to 0.5%, so ditch and switch at this time. You are allowed unlimited withdrawals, and the maximum balance is £1 million.
As the name suggests, the account must be operated by telephone. It has the full £50k savings safety, though this protection is spread across the whole HBOS group; read the Safe Savings guide for full details.
Quick Stats: Rate: 3.15% variable AER, inc 2.65% bonus. Min. Deposit: £1. Access: Phone Withdrawal restrictions: None - Top Guaranteed Rate: 3.36% (min. £25,000)
Investec 3.36% AER, but need notice for access.
The High 5 account from Investec pays the average of the five highest savings rates in the market, currently 3.36% AER (as decided by price comparison site Moneyfacts), and it changes every Wednesday.
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 dont need instant access to your cash. It may also be worth you checking the fixed savings accounts section. Quick Stats: Rate: 3.36% variable AER. Min. Deposit: £25,000. Access: Online Withdrawal restrictions: Three months notice - Top Clean Rate, but tricky access: 2.8% (min £1,000)
West Brom 2.8% AER, but only three withdrawals per year.
The top rate that doesn't include a bonus is West Brom BS's phone and post operated No Notice Saver Direct account. It pays 2.8% on balances of £1,000 or more, but only allows three penalty-free withdrawals per year (and each has to be at least £250). Make more, or let the balance drop below £1,000, and the rate drops to a pathetic 0.05%.
West Brom BS has the full £50,000 savings safety protection as any UK account. However as a note, in April 2009 financial strength rating's agency Moodys downgraded a heap of institutions, including West Brom (read Building Society Downgrades news) meaning it's more important to be watchful about not going beyond this limit, see the full Safe Savings guide for more. Quick Stats: Rate: 2.8% variable AER. Min. Deposit: £1,000. Access: Phone/Post Withdrawal restrictions: Only three per year, each min £250 - Top Clean, Easy Access Account: 2.49% (min. £1).
Intelligent Finance 2.49% AER.
The top clean rate available's with Intelligent Finance's iSaver, which pays 2.49% AER on balances from £1. It's an online-only account, and allows unlimited penalty-free withdrawals.
IF is part of the HBOS group, and as such has the normal Safe Savings protection up to £50,000. However, it means that if you have money in another of the HBOS owned banks (Halifax, Bank of Scotland, B Midshires, Saga or The AA), then you only get one lot of £50k protection between them.
Quick Stats: Rate: 2.49% variable AER. Min. Deposit: £1. Access: Online Withdrawal restrictions: None
Specialised Alternatives
With safety, introductory bonuses and notice-free access all playing their part in savers' decisions, we've split a selection of extra accounts into sections to make perusing them easier. Click a title to see all the accounts available.
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Spreading Cash for Safety
Top accounts for splitting big balances
Click for full info
If you’re concerned about getting maximum safety on your savings, then, as explained in the Savings Safety guide, they're only protected up to £50,000 per person per financial institution. Therefore to keep amounts bigger than this safe you need to spread the cash around.
The following are the remaining top payers in the market (or use the next alternative; 100% protected savings accounts, at a lower rate).
West Bromwich BS 3.38% AER.
The branch only account from West Bromwich BS pays 3.38% AER on balances over £100, up to £100,000. This includes a 0.6% bonus until 31st October 2010. The account only allows two withdrawals per year (1 April - 31 March). West Bromwich's branches are mostly in the West Midlands.- Sainsburys 3.2% AER.
The Online Saver from Sainsburys pays new customers 3.2% AER (min £1,000) for twelve months from opening, provided you make less than four withdrawals. If you make four or more, or your balance drops below £1,000, the rate plummets to 0.5%. This is also the rate you'll get after twelve months.
- Scottish Widows 3.01% AER.
The Internet Saver Account from Scottish Widows* pays 3.01% AER including a bonus of 1% for a year on balances over £1. There are no limits on withdrawals.
- Barnsley BS 3% AER.
The online saver from Barnsley BS pays 3% AER on balances over £1. This includes a bonus of 0.5% until 31 December 2010. You can make unlimited withdrawals and manage the account online.
Barnsley and Yorkshire BS are joint for safety purposes; you get the full UK £50k protection per person, but spread across both of them. Full details are in the Savings Safety guide.
- Tesco 3% AER.
New customers to Tesco can get 3% AER with their Internet Saver on balances between £1 and £100,000. This includes a bonus of 1.75% for a year. The account is online only and allows unlimited withdrawals.
- Alliance & Leicester 3% AER.
For anyone saving over £1,000, Alliance & Leicester's* Online Saver (Issue 6), pays 3% AER, with the bonus lasting 12 months, and is available online. The exact bonus size depends on your balance; save less that £25,000 and it is 2.5%; crucially though, whatever your balance, you get the 3% AER variable rate overall.
A&L is part of the Santander group of banks (inc. Abbey, Bradford & Bingley and Asda). For now, it has its own lot of £50,000 Safe Savings protection, separate from the other Santander banks. However, this is likely to change by the end of 2010; all updates will go in the free weekly email.
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100% Protected Savings
For more than £50,000 in one place.
Click for full info
If you've a lot of cash, over the £50,000 amount, and the safety factor worries you, there are a few places that give 100% guarantee on savings, though you will sacrifice the rate earned.
- UK Government Owned.
The best paying Northern Rock account is the eSaver (issue 2) which pays 2.5% AER including 1% bonus for a year, on balances between £1 and £250,000. With NS&I the best option is its Direct ISA, again though the rate is nothing to shout about. - Buy a tax certificate.
Those who are self employed can pay tax early by buying what’s called a tax certificate for your liabilities in advance. These do pay interest, though substantially less than a top savings account. Yet there’s nothing safer than knowing your tax bill is sorted.
- Pay off debts.
To reiterate the information at the start of this guide. Paying off debts or mortgages, is one extremely safe use of your money. See the Should I Repay Debts? guide.
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Big UK Banks' Top Accounts
The highest rates from the 'big' institutions
Click for full info
To help spread savings, it's worth examining the top accounts at some of the big UK institutions.
Barclays.
Barclays* e-savings Reward pays 1.26% AER on amounts between £1 and £2 million, in months when you make no withdrawals, and 0.85% in months when you do make withdrawals. Both of these include a 0.75% bonus lasting a year.-
HBOS (Halifax/Bank Of Scotland).
Bank of Scotland's Instant Access Savings Account pays 0.5% AER on a min of £1 and promises to never be lower than 0.50% below Bank of England base rate until 1 Jan 2012. Alternatively the Halifax Guaranteed Saver Reward pays 2.5% (3% if you have a current account) when saving more than £2,500 and making no more than 4 withdrawals a year. HSBC.
HSBC's* Online Bonus Saver pays 0.75% AER when you don't make a withdrawal (0.25% AER when you do) on amounts between £1 and £50,000.-
Lloyds TSB.
Lloyds TSB eSavings pays from 1.6% AER with £1 up to 2.5% for amounts above £10,000. All rates include a 1.50% bonus for the first 12 months. Nationwide.
If you have a FlexAccount with Nationwide you can get 2% AER with the e-Savings Plus* account, as long as you make less than 4 withdrawals, on savings between £1 and £500,000.
In April 2009, financial strength rating's agency Moodys substantially downgraded a heap of banks and building societies, including Nationwide (read Building Society Downgrades news) meaning it's more important to be watchful about not going beyond the £50,000 government guarantee. For full info read the Are Your Savings Safe? guide.NatWest.
Natwest* e-savings offers 1% AER when saving a min of £1.RBS.
RBS's* Direct Saver has a rate of 1% AER with £1 up to 1.5% for amounts above £50,000.
- Over 60s Account.
Alternative option for the over 60s
Click for full info
Coventry Building Society.
For the over 60s, Coventry Building Society's Sixty Plus PostSave Issue 3 account pays 2.25% for balances over £500 (up to £250,000). The rate is guaranteed to be at least 0.25% above
base rate
until 31 Mar 2010, although it does include a one year bonus of 0.85%.
You can only make 12 penalty-free withdrawals per year, and a minimum of £500 each time, with additional withdrawals having a charge of 30 days' interest. As the name suggests it is a postal account but you can view your balance online.
In April 2009, financial strength rating's agency Moodys substantially downgraded a heap of banks and building societies, including Coventry (read Building Society Downgrades news) meaning it's more important to be watchful about not going beyond the £50,000 government guarantee. For full info read the Are Your Savings Safe? guide.
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Top Cash Machine Access Savings.
Some accounts provide an ATM cashcard
Click for full info
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.
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Yorkshire Building Society.
The Yorkshire BS Internet Saver, with optional cash card, pays 2.1% AER. You only need £1 to open it and can save up to £1 million.
In April 2009, financial strength rating's agency Moodys substantially downgraded a heap of banks and building societies, including Yorkshire (read Building Society Downgrades news) meaning it's more important to be watchful about not going beyond the £50,000 government guarantee. For full info read the Are Your Savings Safe? guide. -
Bank of Scotland.
If you don't want an online account, the top clean non-web account for this is Bank of Scotland's Instant Access account, also with optional cash card and min £1, paying 0.5% AER.
Fancy looking locally?
All the above rates are available to anyone, yet 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.
Also, remember all these accounts have variable rates meaning providers can change them. If you want to fix your rate from the outset, you must be prepared to lock your cash away, see Fixed Rate Savings.
How to guarantee a continually top rate
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. It's important to regularly monitor your account's rate and if it plummets, ditch and switch. Yet there are some alternatives to monitoring interest rates...
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. It is also very important to understand that the longer you fix for, the more you are RISKING the fact that an unpredicatable 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. Plus if the savings safety status of the institution changes, it'd be more difficult to get your cash out.
Yet currently, that's balanced out because there are some decent rates available. This is because many lenders are desperate to get hold of your cash so they can lend it out at high rates during the credit crunch. Plus 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.
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.
The Best One Year Fixed Rates
- Julian Hodge 3.7% AER. From £1,000, Postal access.
The top account is Julian Hodge's 1 Year Capital Millenium Bond, paying 3.7% AER on balances over £1,000. The name might sound a bit crazy, like it is a risky investement, but this pays a fixed rate of interest like the other bonds here.
No withdrawals are allowed and the account must be applied for and operated by post. Julian Hodge has the full £50,000 savings safety protection like any UK account, see the full Safe Savings guide for more.
- Post Office 3.7% AER.
Important! NOT protected by UK's safety scheme.
Another fixed rate account from the Post Office (min £500) pays 3.7% AER. However, it is NOT covered by the UK compensation scheme.
Post Office: This is protected by the Irish safety scheme, as Post Office Savings are run by Bank of Ireland. This covers an unlimited amount of savings until 2010. However, if it went bust, you would legally be entirely reliant on Ireland's government for any compensation. For full info, read Are Irish Banks Safe? blog and the foreign banks section of our savings safety guide.
- Northern Rock 3.4% AER. 100% Safety. Post, phone & branch, min. £1.
Government-owned bank Northern Rock, pays 3.4% interest, if you lock the cash away in a 1 Year Fixed Rate Bond until 1 October 2010. You can save from just £1 up to £2 million, and you can access the account in branches, by phone or post.
Like NS&I, Northern Rock is also 100% safe, as it is a nationalised bank. In the slim chance it's sold within the bond's fixed term, the safety could drop back to normal £50,000 level, though it'd be hoped the government would pick wisely about the institution any savings were sold to.
For full details read the 100% safety section of Savings Safety guide.
The Top Long Term Fix with Access
One account's worth considering before you look at the rest, as it offers a decent, though not table topping rate, plus the added bonuses of 100% safety and access to the cash when you need it.
- Fix at up to 4.6%, WITH access and 100% safety! NS&I
The rate you earn depends on how long you save the cashGovernment-owned NS&I's 5 Year Guaranteed Growth Bond pays 4.6% AER fixed for five years (min £500), but has one huge different characteristic to most fixed accounts; you can close the account at any time, by paying a penalty of 90 days' interest.
Don't worry that it's called a Growth Bond; it's actually a simple fixed rate savings account that's taxed. Plus as it's state run, your cash is 100% safe, up to the maximum balance of £1 million.
Here, the get-out clause means you can fix for five years, but still have the option to grab your cash at any point, and have earned a decent interest rate for that time. Provided you keep it in for at least eleven months, you'll beat any instant access rates too.
Here's a quick breakdown of the real interest rate you'll receive if you take out your cash after specific amounts of time...
Actual interest rate if withdraw after...6 months2.3% AER1 year3.5% AER18 months3.8% AER2 years4% AER3 years4.2% AER
Due to a legal quirk, tax will be automatically deducted from the interest earned, which means non-taxpayers will need to claim this back direct from HMRC. Quick Stats: Rate: 4.6% AER, fixed for 5 years. Min. Deposit: £500 Access: Online, phone, post. 90 days' interest penalty if you close account early.
The Best Two Year Fixed Rates
By saving for a bit longer, the rates available can jump. Always remember that the longer you lock cash away for, the more of a chance there is that rates will rise while your cash is untouchable. Currently, many economists predict rates will stay low into 2010, but after that who knows.
- Birmingham Midshires 4.25% AER. Online from £1, WITH access.
If you want to lock your money away for two years, Birmingham Midshires* Interent Fixed Rate Bond pays 4.25% on balances of £1, up to £10 million. Unusually (and handily), this allows withdrawals at any time, for a penalty of 90 days lost interest.
B Midshires is part of the HBOS group, and as such has the normal Safe Savings protection up to £50,000. However, it means that if you have money in another of the HBOS owned banks (Halifax, Bank of Scotland, The AA, Saga or IF), then you only get one lot of £50k protection between them.
- Principality BS 4.25% AER. Online, Post, Branch & Phone. Min £500.
If you have over £500 to save Principality BS's Two Year Fixed Rate Bond pays 4.25% AER. The account can be accessed online, in branches, by phone or post.
In April 2009, financial strength rating's agency Moodys substantially downgraded a heap of banks and building societies, including Principality (read Building Society Downgrades news) meaning it's more important to be watchful about not going beyond the £50,000 government guarantee. For full info read the Are Your Savings Safe? guide.
- Islamic Bank of Britain 4.5% AER. Online min £5,000.
The highest two year rate is with the Islamic Bank of Britain's Fixed Term account, if you save £5,000. It offers a 'Target Profit Rate' of 4.5% yearly interest; as the bank is Sharia'a (Islamic law) compliant, all interest is banned. Instead the bank invests your cash in 'ethical trading' and aims to get you a 4.5% return.
While its meant to be the equivalent of savings, this does means you're not 100% guaranteed to get the target rate, so there’s a higher risk element. Though in its five year history, the bank hasn't paid less than the advertised rate. However if you have any doubts over this, put your money elsewhere.
Also, it's contractually obliged to immediately inform you if it looks like the rate may not be achieved, at which point the saver can terminate the account and take the profit made up to that point.
Islamic Bank is UK-registered, meaning you get the normal Safe Savings protection up to £50,000.
The Best Three Year Fixed Rates
It's possible to push the rate up even further, by sacrificing access to the cash for longer. Yet here you are taking a bigger gamble on rates staying low for a significant period; if UK interest rates recover between now and 2012, you could lose out as your cash is stuck at this rate.
To keep things simple, we have stuck to accounts that lock your cash in and no more. It's possible that by sacrificing access for a few months more, you could up the rate slightly above the best here.
- ICICI 4.7% AER. Online, from £1,000
The UK subsidiary of Indian owned bank, ICICI, is paying 4.7% AER on its three year fixed rate account, for balances over £1,000, with no maximum. ICICI is a full UK subsidiary and thus in the event the bank went bust, you have the full protection up to the usual £50,000 per person, per financial institution.
Some concerns were raised over its parent bank's stability, yet our policy is to include ALL the top rates. Remember that saving over £50,000 in ANY one institution constitutes a potential risk. If you are considering putting money in, ensure you read both the foreign banks section of the Are Your Savings Safe? guide and Martin's specific ICICI: How Safe is it? blog.
- B'ham Midshires 4.65% AER. Postal, min. £1
If you have less to save, Birmingham Midshires* has a three year fixed rate bond which pays 4.65% and is a postal account. You can save just £1, up to a £10 million maximum.
Birmingham Midshires is part of the HBOS group, and as such has the normal Safe Savings protection up to £50,000. However, it means that if you have money in another of the HBOS owned banks (Halifax, Bank of Scotland, The AA, Saga or IF), then you only get one lot of £50k protection between them.
- Use the net to compare top rates
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.
Highest guaranteed rates...
If you want surety that even if you don't check your saving rate, you're safely getting at least a reasonable deal, one route is to pick a high paying account that guarantees to match or beat either the Bank of England base rate, other top accounts, or the Retail Price Index – the UK's measure of inflation.
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Good Rate Guarantee
The High 5 account from Investec pays the average of the five highest savings rates in the market, currently 3.36% AER (as decided by price comparison site Moneyfacts). This ensures your rate will be at or near the best possible, though it will never be the top rate available. To get this rate you need to save over £25,000 and give three months notice to withdraw any money so only open this if you dont need instant access to your cash. It may also be worth you checking the fixed savings accounts section.
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 work-around.
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.
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 one of these accounts, 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' 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 £50,000 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 do check there are no turnover restrictions before applying for an account.
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Top Small Biz Savings Accounts.
Selection of the best fixed, guaranteed and instant access rates
Click for full info
The highest rate depends on how much access you want to your cash, and the amount of money you've got to save.
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Top Fixed Rate: Standard Life, 2.9% AER for a year
The Standard Life Fixed Rate Business Bond pays 2.9% AER fixed until 9 September 2010, from a minimum balance of £1,000.
Fixed accounts do carry a risk though; you are sacrificing access to your money for the whole period. If you may need to get at it in this time, or will want to switch accounts if the top rates available soar, fixing's a bad option for you.
If you'd rather fix for exactly a year, the top payer is Scottish Widows' Fixed Term Business Deposit Account, which pays 2.5% AER, from a higher minimum balance of £10,000.
- Guaranteed Good Rate: Investec 2.5% AER
The Business High 5 account from Investec pays the average of the five highest business savings rates in the market, currently 2.5% AER (as decided by price comparison site Moneyfacts).
You need to save over £50,000 and give three months notice to withdraw any money, so only go for this if you dont need instant access to your cash. The accounts operated by post or over the phone, and has a maximum allowed balance of £250,000.
- Top Quick Access: Scottish Widows, up to 2% AER
If you want to be able to lay your hands on your funds more quickly, a choice of two phone and postal Scottish Widows accounts are your best bets.
The Business 7 Day Notice account (min £500) pays the highest quick access rate: 1.75% AER for balances under £50,000 and 2% AER if your savings top this. However, as the name suggests, you'll have to wait a week to get your cash out.
For businesses that need no-notice access, the same bank's Business Deposit account pays 1.25% AER if you're saving less than £50,000, and 1.5% AER if the balance tops £50k.
If you spot any accounts we haven't included, please let us know in the Biz Savings feedback discussion.
The Savings Calculator
Below is a special calculator designed to tell you all you need to know about your savings. 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.
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