Top Savings Accounts
1.46% easy access or up to 2.36% fixed
Banks are battling for your cash with many increasing their interest rates in a bid to move up the best-buy tables. We take you through the maze of savings accounts on offer to find the most profitable home for your cash – and keep it safe.
Our best buys, incl...
- Easy-access savings: allows withdrawals
- Savings via your bank account
- Fixed-rate accounts: must lock cash away
In this guide
- Nine savings account need-to-knows
- Tool: Savings Calculator
- How to complain about your provider
- Savings Q&A
Get Our Free Money Tips Email!
What is a savings account? Plus nine savings need-to-knows
A savings account is basically just a place to dunk cash in to earn interest and save for the future. Some accounts are variable rates with easy access while others are fixed where access to your money is restricted, with other variations too. But don't just go for the headline-screaming highest rate without first examining how it works and what the alternatives are.
Since April 2016, the personal savings allowance (PSA) means:
- All savings interest is paid gross, ie, there'll be no tax taken off.
- Basic 20% rate taxpayers can earn £1,000/year interest tax-free.
- Higher 40% rate taxpayers can earn £500/year interest tax-free.
- Top 45% rate taxpayers don't get a PSA, so all interest is taxable.
- Cash ISAs, Premium Bonds and other tax-free savings interest DON'T count towards the £1,000 (or £500) PSA limit, so you can get this interest too.
- If you earn interest over the limit, you pay tax at your income tax rate, but only on the amount over the limit.
If you do then owe tax, it'll be taken through your tax code. If you self-assess, you'll declare anything you need to pay there. HMRC estimates the PSA takes 95% of people out of paying savings interest tax altogether. For full info, see our Personal Savings Allowance guide.
Already used your personal savings allowance? Consider a cash ISA as you never pay tax on the interest. Anyone aged 16 or over can put up to £20,000 in during the current tax year. Traditionally this was the first place for taxpayers to put a lump sum, yet the personal savings allowance has made them a less attractive option. Read our Top Cash ISAs guide for full analysis on whether or not you should open one.
In a couple and in different tax bands? If one of you pays a lower rate of tax than the other, it's worth considering financially whose name you save in (but ONLY if you trust them). Put it in the lower-rate taxpayer's name and it'll fall under a higher personal savings allowance, so you can save more without paying tax.
If the interest cost of your debt is more than you'd earn on savings, you're better off paying down the debt. If you've £1,000 on a credit card at 20% it costs £200 a year, assuming a constant balance. In savings at 2%, you'd earn £20 a year, so you'd be £180 a year better off repaying the card. See Should I Repay Debts With Savings?
Well, if your debt is free, the urgency isn't there to pay it off. But debt at 0% tends to have an end date.
So long as you meet minimum payments, there's nothing wrong with saving while the debt is at 0%, but then paying it off when the intro deal ends. This way, you'll have the best of both worlds – you'll have paid off the debt without paying any interest, plus you'll have earned interest on the savings while you had them.
A low rate is different. You need to examine whether you're actually paying more interest on the debt than you're getting on the savings.
It is important to have access to an emergency fund in case the worst happens, but that doesn't mean you have to actually have a pot of cash. If you pay off an expensive credit card, then keep the card for emergencies.
If nothing untoward happens then you never need to use the card, but if something goes wrong, then you could always use the card and you'd be no worse off than had you not paid it off anyway.
A practical example of why this works: Johnny Comelately
Johnny Comelately currently has £5,000 saved up – earning 2% interest – in case of emergency, yet he also has £5,000 on credit cards at 18%. Thus while his savings are earning him £100 a year, his debts cost £900. Overall he is paying out £800 a year.
Now compare what happens if he pays off his debts with his savings vs not doing so:
Situation A: No emergency happens
No change. Keeping both debts and savings costs Johnny £800 a year.
Pay off debts with savings. Johnny now neither earns nor pays any interest, thus is relatively £800 a year better off, and all the new cash he puts aside can go towards genuinely saving.
Situation B: After a year he has to pay £5,000 for an emergency roof fix
No change. Johnny uses the savings for the emergency. This leaves him with no savings and £5,000 of credit card debt at 18%.
Pay off debts with savings. As Johnny has no savings, he has to borrow the £5,000 on his credit cards. This leaves him with no savings and £5,000 debt on his credit card at 18%.
In other words, Johnny is in exactly the same position in situation B, regardless of what he does. Yet before the emergency, he was £800 a year better off by paying off his debts with his savings.
So overall, whether an emergency happens or not, the best result is to pay off your debts with your savings. The only time to beware of this is if you're not assured of being able to reborrow the cash.
Usually with credit cards it's fine, as they're a readily available source of credit, but if your debt is a personal loan, there's no guarantee you will be able to get another – in which case, an emergency fund is sensible.
This is the same principle as above: if the mortgage rate is higher than the savings rate and you can spare the cash, overpaying is a solid financial decision. However, there are possible complications, such as penalties for paying too much...
Whether you can overpay your mortgage or not depends on your mortgage provider and the type of mortgage you've taken out.
The vast majority of mortgages allow you to overpay, though there's usually a limit – commonly £10,000 a year or 10% of the value of your mortgage debt each year.
It's important to check how it plans to use your overpayment. Some lenders will reduce the term of your mortgage, so your monthly payments stay the same but it'll be paid off quicker. Where the amount overpaid is small enough, others use it to reduce your next monthly payment, which only saves you a few days' interest. Ask to reduce the balance to really see the benefit.
If you have an offset mortgage, the ability to access those extra payments is usually part of the deal. An offset is where you build up savings to reduce/offset the amount of debt you pay interest on, so if you had a £100,000 mortgage and £20,000 in savings, you only pay interest on £80,000.
On other types of mortgages, some flexible deals allow you to borrow back overpayments. However, this practice is far less common now for new mortgages. Check your mortgage terms carefully.
One warning: just because you've overpaid, it doesn't automatically mean you'll be allowed to borrow the money back in all cases. Your mortgage lender will do checks on affordability so they comply with current lending criteria. For example, you might be turned down if they thought you'd struggle to make future contractual payments – they'd want to keep hold of as much of your money as they could in that case.
Surprisingly, some banks' current accounts pay a higher rate of interest than their savings accounts – these are currently the top rates available. Unlike normal savings accounts, you'll need to pass a credit check.
For a selection, see our top pick bank account section below, or for a full range of accounts, see the Best Bank Accounts guide.
This is a specific product for putting up to around £200-£400 in every month (maximum deposits vary by account). If you want to save more, combine a few. The main advantage is they tend to pay much higher rates of interest than standard deals. For more details and best buys, see the full Regular Savings Accounts guide.
Some apps (with your permission) can connect to your current account to determine how much you can afford to save each month. It's done automatically using clever algorithms, though some manual deposits are also permitted. Be aware that there's no protection under the Financial Services Compensation Scheme (FSCS). For full details, see our App-based banking guide.
You may want to consider getting a fixed-rate account – which is just a savings account where the amount you earn is set in stone over a fixed time period. However, you can't usually access the cash during that time, and even if you can, the penalties can be large.
Usually fixed rates are higher than easy access, but if normal savings rates were to increase during that time – and we are now in a position of rising rates – you'd be unable to ditch and switch to a better payer.
See the full top fixed-rate accounts section.
After the calamities that hit big banks such as Northern Rock, RBS and the Lloyds Group, every sensible saver should ask: "Is my money safe?" If it is in a UK-regulated bank or building society, it's protected under the Financial Services Compensation Scheme (FSCS) for up to £85,000 per person. See the Are Your Savings Safe? guide.
To be UK-regulated, a savings or current account needs to be registered as a deposit taker with UK regulator the Financial Conduct Authority.
Many banks are foreign-owned, such as Santander, which is owned by Spain's Banco Santander. However, Santander has UK headquarters and is authorised by UK regulators, so it is covered by the FSCS.
However, some banks that offer products in the UK are not headquartered here – and rely on another country's deposit compensation scheme. A good example of this is Triodos Bank, which sometimes offers decent rates on fixed savings. But it is headquartered in the Netherlands, so you'd be reliant on the Dutch government's compensation scheme if Triodos went bust.
If you want to read more about how savings are protected, please read Are Your Savings Safe?
These are temporary interest boosts to attract new customers. They're actually a good thing for many, as they effectively act as a minimum rate guarantee during the introductory period, promising you at least some interest.
But it is vital to remember the end date and switch as soon as the bonus ends, so you don't languish on a rubbish rate.
Get Our Free Money Tips Email!
Best easy-access savings
The main idea is you pay cash into them, they pay you interest while the money's in the account and you can withdraw whenever you want.
But interest rates are usually lower than on notice and fixed savings accounts, because you pay for the flexibility. If you can save every month, consider a regular savings or app-based account where you can earn up to 5% and your cash is more accessible.
Some accounts limit the number of withdrawals you can make a year. Others won't pay interest in any month a withdrawal is made. So, while they're listed as easy access in that you can have your cash when you like, they're not all truly 'easy' access.
These penalties for withdrawals can have a big impact. For example, you might only withdraw £100, but you'd lose interest on the £80,000 in your account for the month. Terms vary, so always know what taking out your cash will cost, and if you think you may exceed what's allowed, go for a more accessible account.
Bonus rates are temporary interest hikes to attract new customers so the rate will DEFINITELY plummet after the term ends, so ditch and switch then.
They're actually a good thing for many, as they effectively act as a minimum rate guarantee during the introductory period, promising you at least some interest. Plus in a period of dire rates, they at least offer some respite. The rate could still fall during the bonus period if the non-bonus element drops.
Clean rate accounts don't pay a bonus. They are completely variable, so you could end up taking one out, and the provider drops the rate it pays on the account a couple of weeks later.
In our experience, all savings account rates – if you hold the account long enough – become rubbish accounts. But active savers can avoid this by shifting the cash to a better payer once they see their rate has dropped. This can happen at any time with any account that is not fixed.
It's not common, but there are two accounts we know of that will let you do this. However, they don't feature in our best-buy tables, so consider whether you're willing to trade a lower interest rate for easier access to your cash.
MoneySavingExpert.com is a national website serving England, Scotland, Wales and Northern Ireland. So we try to feature accounts open to everyone, which means you need to be able to open them online, or by phone or post.
Branch-based accounts are more difficult, as – unless the account is offered by one of the big banks – it's unlikely that everyone will be able to reach a branch. For example, Skipton Building Society sometimes offers decent branch-based accounts.
But a person in Brighton would have to travel almost 40 miles to their nearest branch to be able to open it. Similarly, someone in Carlisle couldn't access branch-based accounts offered by Ipswich Building Society as there isn't one close by.
It is always worth looking at local building societies as they can occasionally have a corking branch-based account. But because we're a nationwide site, we just can't feature them all.
The simple solution is to study the terms of your account so you know exactly when you can make penalty-free withdrawals.
Sometimes you won't be able to, but at least withdraw just after interest has been paid so you don't lose out.
The Coventry BS Triple Access Saver pays 1.46% AER variable and you can open it with £1+. However, the account stretches the definition of 'easy-access' as you can only make three penalty-free withdrawals a year. Make more than this and you'll be charged 50 days’ interest based on the amount you’re taking out.
As the rate includes a fixed 0.31% bonus until 31 March 2021, be ready to move your cash as the rate will definitely drop after this date.
The Marcus account – a UK brand from US investment bank Goldman Sachs – pays 1.45%, including a fixed 0.1% bonus for 12 months. Keep an eye on the rate in case it drops, especially after a year when the fixed bonus ends (though unusually you can renew the bonus for another 12 months at any time - to do this, log into your Marcus account and select 'Review your savings').
Rate: 1.45% AER variable (incl a fixed 0.1% bonus for 12 months)
Min/max deposit: £1/£100,000
How to open/access: Open online, manage online or by phone
Interest paid: Monthly
Savings protection: Shared with Goldman Sachs International Bank, incl Saga savings accounts opened since Oct 2019
Remember, cash in all the accounts above is protected up to £85,000 per person, per financial institution. If you're lucky enough to have more than this, it's best to spread savings across several different banks in case one gets into difficulty. We've picked a selection of the other top payers…
|Virgin Money||1.45%||£1/£250,000||Online||Two/yr (1)||Full|
|Kent Reliance||1.43%||£1,000/£1m||Online/branch||Unlimited (2)||Full|
|Co-op Bank||1.4%||£500/£1m||Online/phone/branch||Four/yr (3)||Shared (4)|
|Saga (over 50s only)||1.4% (incl fixed 1yr 0.25% bonus)||£1/£100,000||Online||Unlimited||Shared (5)|
(1) We've ranked this below the Marcus account above as you can only make two withdrawals per calendar year and account closure also counts as a withdrawal. (2) If your balance drops below £1,000 following a withdrawal, you'll earn 0.1% interest. (3) If you make five or more withdrawals, you'll earn just 0.3% interest. (4) Co-op Bank shares its protection with Smile. (5) Saga shares its protection with Goldman Sachs International Bank (which includes Marcus).
Best current account savings
Rates are much lower on these accounts than in previous years. Yet you can still beat the easy-access rates above on small amounts, and one even offers security of fixing the rate.
The beauty of fixes is once the account's opened the rate's locked in, regardless of base rate cuts or banks dropping rates at whim. Be aware though, if an account has a variable rate it could change at any time (you'll get 60 days' notice). As these are bank accounts, you'll have to pass a credit check to open one.
Open a Nationwide FlexDirect* account and you'll get 5% AER interest on the first £2,500 of your cash, fixed for a year, as long as you haven't had a FlexDirect account before and you pay in £1,000+ each month. Note that the rate drops to 1% after a year, which isn't such a good deal.
Unusually for a current account with perks, you don't have to set up any direct debits to be paid in – you can just open it as an extra account. But you do need to pass a credit check to get it.
Rate: 5% AER fixed on up to £2,500 for 12 months, 1% AER variable after
Min monthly pay-in: £1,000 to get interest (equates to £12,500 annual salary)
How to open/access: Online, branch or by phone
Interest paid: Monthly
Savings protection: Full
How do I get the interest? You need to pay in £1,000 a month.
What if I can't pay in £1,000? Nothing happens, you just won't be paid any interest that month.
How much will the overdraft cost? For the first year, your overdraft will cost nothing as long as you stay within your limit. After that, you'd pay 50p each day you're overdrawn (within your limit). So if you have a £1,500 limit and owe £1,000, you'll pay £182.50 if you're overdrawn every day of the year.
Don't bust your overdraft limit, as you'll pay £5 a day plus a £5 charge for every paid or unpaid item.
Can I have two accounts? And two overdrafts? You can definitely have two accounts, and can even get two lots of interest – though one of your accounts must be joint to get this. Nationwide says you may be able to get two overdrafts if you have two FlexDirect accounts, but each would be assessed on its merits, so there's no guarantee.
Is my money protected? Yes, Nationwide has full FSCS protection, so money saved with it is safe up to £85,000.
The TSB Classic Plus* account pays 3% AER on the first £1,500 in your account. To get it, you must pay in £500 each month and be registered for online and paperless banking. If you don't meet the criteria in any given month, you won't be paid interest for that month.
Like the Nationwide account above, you don't need to set up any direct debits to get the interest – so you can just open it as an extra. However, you will need to pass a credit check.
Rate: 3% AER variable on up to £1,500
Min monthly pay-in: £500 to get interest (equates to £6,000 annual salary)
How to open/access: Open online or in branch, manage online, in branch or by phone
Interest paid: Monthly
Savings protection: Full
How do I get the interest? You need to pay in £500 a month, register for online banking, paperless statements and correspondence.
What if I can't pay in £500? Nothing happens, you just won't be paid any interest that month.
Can I have two accounts? And two overdrafts? You can have two accounts, and can even get two lots of interest – though one of your accounts must be joint to get this.
Is my money protected? Yes, TSB has full FSCS protection, so up to £85,000 saved with it is safe.
It's not just the accounts above that offer decent interest rates. Some others offer rates that can compete with the top easy-access savings, or pay ongoing rewards, so are a decent option if you want a current account paying interest. Make sure you check the account regularly in case the rate drops.
|For comparison, the top easy-access savings deal open to all pays 1.46%.|
|Bank of Scotland Vantage||1% on £1-£3,999.99 and 2% on balance between £4,000-£5,000 (2)||£60||£1,000||3|
|Club Lloyds||1% on £1-£3,999.99 and 2% on balance between £4,000-£5,000 (3). Plus £125 for switching
||£60||£1,500||2 (2nd must be joint)|
|Halifax||£2/mth (4)||£24||£750||2 (2nd must be joint)|
|(1) Before any tax if you always held the max balance+. (2) Must pay in £1,000+/mth, pay out 2+ monthly direct debits and stay in credit. (3) Must pay out 2+ monthly direct debits. (4) Must pay in £750/mth, pay out 2+ direct debits and stay in credit. The £2 is classed as after having paid basic-rate tax. So higher taxpayers will lose some of the gain.
Best fixed-rate accounts
Most savings accounts are variable, so the rate can change both with the Bank of England's base rate or at the provider's whim – so to keep earning well you need to actively monitor accounts. Yet there is an alternative...
Fixed-rate accounts (aka 'fixed-rate bonds') are savings accounts giving a guaranteed rate for a set time. The best-buy fixed-rate deals are almost always higher than the best-buy easy-access rates.
The big catch is you can't take your money out during that time, and you won't benefit if other rates rise in that period. Therefore, they're only suitable for those who are happy to lock cash away for the entire term.
It's difficult to say. The Bank of England raised interest rates from their historic 0.25% low twice, in November 2017 and August 2018, though only by a total of 0.5 percentage points. It indicated further rate rises would be slow and gradual.
However, if you are thinking of locking in, it's best to do it for a short time, then you don't lose out for long if rates do go up during the period of your fix.
Whatever you choose to do, it's important to go into fixed-rate savings with your eyes open and know the risks. Of course, if rates don't rise again in the short term and you pick well, you will earn more in a fix in the meantime.
We list the AER as it's the best way to compare rates, rather than listing some accounts at the AER and some at a gross rate of interest.
The difference comes in the way these accounts pay interest. Most pay interest into the fixed account itself, meaning you get interest on that interest in subsequent years.
But Secure Trust Bank, Tandem and Tesco Bank pay interest into separate accounts, meaning that you don't earn interest on the interest, and therefore the actual rate of interest you get is slightly lower than the AER.
No. With fixed savings, you lock away the cash in return for a better reward other than in extremely rare circumstances.
Think for a second about it from the bank's point of view. If it knows it has your cash for three years, then it can lend that out for a three-year period safe in the knowledge you won't demand it back. It has the certainty of holding your cash, and you have the certainty about the rate you get.
This certainty is the reason the rate is higher. And this is also the reason that easy-access savings tend to be poor payers in comparison.
When using fixed-rate savings, you won't usually get paid monthly interest (though some accounts offer this). Therefore many who rely on interest earned from savings as an income stream don't fix, even though they pay higher rates. Yet there's a workaround.
Here's an example (ignoring tax for ease of explanation)...
You've £100,000 and can get 2% in a year-long fixed account and 1.3% in an instant-access account. You'd like roughly £2,000 of interest from these savings to supplement your income.
Put £98,000 in the fixed account, and £2,000 in the instant access. Then spend the instant-access money over the year, knowing the £1,960 interest earned in the fixed account will just about make up for it. Then you're effectively getting the higher 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, 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.
Currently, the top sharia accounts beat the rates offered on standard fixed accounts for most terms – though as they pay an 'expected' rate, by definition, it's not guaranteed.
We know not everyone will go down this route, so first we'll run through the standard best buys, then explain sharia banking in more detail (plus a trick to bag cashback on top through savings marketplace Raisin).
|ICICI Bank UK||1.75%||Monthly or annually||£1,000/No max||Online||Full|
|Charter Savings||1.74%||Monthly or annually||£5,000/£1m||Online||Full|
|Best 'Big Brand' savings. We know some of you want a 'name you know', so here's the top payer.|
|Post Office||1.41%||Monthly or annually||£500/£2m||Online||Shared (2)|
|(1) You can save from £1,000 but you won't get any cashback. (2) Post Office shares its FSCS protection with AA Savings and Bank of Ireland UK.
Want a shorter fix? Get 1.63% for nine months
If you don't want to lock your money away for a full year, OakNorth pays 1.63% AER for nine months, or a slightly lower 1.6% AER for six months. You can open it online and save between £1 and £500,000.
|Axis Bank (via Raisin)||1.9% + newbies can claim £10-£100 cashback||On maturity||£10,000 (1)/£85,000||Online||Full|
|Union Bank of India UK*||1.9%||On maturity||£5,000 (2)/£340,000||Online||Full|
|Zenith Bank UK||1.85%||Annually||£1,000/£2m||Online||Full|
|Best 'Big Brand' savings. We know some of you want a 'name you know', so here's the top payer.|
|Post Office||1.46%||Monthly or annually||£500/£2m||Online||Shared (3)|
|(1) You can save from £1,000 but you won't get any cashback. (2) You can save from £1,000 if you open the account by post or in branch. (3) Post Office shares its FSCS protection with AA Savings and Bank of Ireland UK.|
|Axis Bank (via Raisin)||2% + newbies can claim £10-£100 cashback||On maturity||£10,000 (1)/£85,000||Online||Full|
|ICICI Bank UK||2%||Monthly or annually||£1,000/No max||Online||Full|
Best 'Big Brand' savings. We know some of you want a 'name you know', so here's the top payer.
|Tesco Bank||1.55%||Monthly or annually||£2,000/£5m||Online/ phone||Full|
|Saving £10,000+? You can beat 2% above by opening a Zenith Bank UK if you're a newbie to savings marketplace Raisin as it pays cashback. (1) You can save from £1,000 but you won't get any cashback.|
|United Bank UK||2.36%||Monthly, annually or on maturity||£2,000/£1m||Branch / post||Full|
|Union Bank of India UK*||2.15%||On maturity||£5,000 (1)/£340,000||Online||Full|
|The Melton BS||2.12%||Monthly||£1,000/£500,000||Post/ branch||Full|
|Best 'Big Brand' savings. We know some of you want a 'name you know', so here's the top payer.|
|Tesco Bank||1.85%||Monthly or annually||£2,000/£5m||Online/ phone||Full|
Sharia accounts – in accordance with Islamic banking principles – prohibit interest. Instead, they give 'expected profit' rates which, by definition, mean returns aren't guaranteed – though we're not aware of any UK-based sharia banks that have failed to pay the expected rate in the past.
The accounts are open to anyone, of any faith, and the ones below are fully UK-regulated, meaning you get £85,000 per person, per institution savings safety protection. Sharia banks also follow a rule not to invest in areas like gambling and alcohol.
Here's a list of the sharia accounts that currently beat the rates offered by traditional savings...
|Saving £10k+? You may be able to beat the rates below by applying for a sharia account through savings marketplace Raisin, where you'll earn £10-£100 cashback.|
|Al Rayan||One year||2.07%||Quarterly or annually||£1,000/None||Online||Full|
|Al Rayan||Two years||2.32%||Quarterly or at maturity||£1,000/None||Online||Full|
|Al Rayan||Three years||2.42%||Quarterly or at maturity||£1,000/None||Online||Full|
'Savings marketplace' Raisin offers new customers cashback when they open their first savings account through it and deposit at least £10,000.
A £10 bonus is available if you deposit £10,000-£39,999, £80 bonus on £40,000-£74,999 or a £100 bonus if you've £75,000-£85,000 – but you have to claim it.
Some Raisin accounts are sharia accounts, meaning they pay 'expected profit rates' rather than interest. See sharia info above for more on how they work.
With the cashback, all these accounts can beat the rates above. Interest on the accounts below is paid annually or at maturity.
How does Raisin cashback work?
To get the bonus, you must follow these steps:
- Sign up online to Raisin.
- Open a fixed bond through Raisin.
- Pay in at least £10,000 within 56 days of opening it. You'll need to do a bank transfer to your Raisin UK account – this is powered by Starling Bank, which is regulated by the Financial Conduct Authority (FCA). The money will then be automatically moved via Raisin's partner Meteor Investment Management (MIM), which is also FCA-regulated, and will reach the bank within four working days, when it'll start earning interest.
- Important. Annoyingly, you have to claim the bonus. Email email@example.com from the address you signed up with within six months of funding your account. You need to include the subject line 'Welcome bonus', plus your name and the amount you're eligible to claim.
The bonus will be paid into your Raisin account within 14 days.
This is complex, so we've more info on how it works...
Raisin describes itself as a 'savings marketplace' – it has partnerships with various standard and sharia banks, which is how it makes its money. Set up a Raisin account and you can then apply for a variety of fixed-term savings accounts through it – meaning you only need to enter your details once.
It launched in Germany in 2013, expanding to the UK earlier this year, and has backing from investors including PayPal.
Raisin UK accounts are provided by FCA-regulated Starling Bank. When you add money to a Raisin account, before funding your fixed-rate product, your funds will be covered by Starling's £85,000 FSCS protection.
This gets complex, so stick with us. For the accounts above, payments are then automatically transferred via MIM, which passes your money to Bank & Clients (B&C), Gatehouse or ICICI Bank UK. There it's covered by B&C, Gatehouse or ICICI's £85,000 FSCS protection.
For the short time MIM holds your money, it's technically held in trust in an MIM client account with RBS. Yet the FSCS has confirmed in this type of structure you still get the UK £85,000 per person, per institution savings safety protection of the account provider, ie, B&C, Gatehouse or ICICI (between leaving your Raisin UK account and arriving with the end bank, it's via RBS's protection).
Be aware that not all banks Raisin has partnered with are covered by the FSCS – some are protected by European deposit schemes, so it could be harder to get your money back if the bank went bust. For more on how savings are protected, see Are Your Savings Safe?
Raisin will email you about a month before your fixed term ends, asking what you want to do with the money. You can choose to get it paid back to your bank account or to open another product with Raisin – remember, it won't necessarily offer the best rates, so check before opening another account.
Do nothing, and the money will go back to your Raisin UK account until you tell it what to do – so make sure you respond to the email or it'll be sitting earning zero interest.
If you have any issues with your account, you need to contact Raisin directly, which you can do by email, phone or secure messaging when logged in online.
Raisin only has links with a few banks at the moment, so its offering is not whole of market – this means there may be other providers offering better rates. Before you sign up to a new account through Raisin, check this guide to see if the rate can be beaten.
Best notice savings accounts
The 95-day notice account from Investec allows you to beat the easy-access rates above, but you must give 95 days' notice before each cash withdrawal – so only get this account if you'd never need the money in an emergency.
Note: If you don't access your account for 90 days, you'll earn a further 0.05% AER, taking your interest rate to 1.85% AER variable - though you'll lose this 'loyalty rate' as soon as you give notice to withdraw funds (or if your balance drops below £10,000).
|Close Brothers||95 days||1.72% (2)||£10,000/£2m||Post||Full|
|Kent Reliance||60 days||1.5% (3)||£1,000/£1m||Online/ post/ branch||Full|
|(1) You must give this notice period before making a withdrawal. (2) You'll earn 0.5% interest if your balance falls below £10,000. (3) You'll earn just 0.1% interest if your balance falls below £1,000.|
The short answer's yes. The clue's in the name.
You may find a few notice accounts will allow you immediate (or at least sooner) access to your funds and charge you an interest penalty for 'breaking the rules'. But these are few and far between.
If you think you might need immediate access to your cash, it's much safer to opt for an easy-access account.
Get Our Free Money Tips Email!
The Savings Calculator
This multifunctional calculator allows you to calculate how much interest you'll be paid, how long you'll need to save for something or tell you how much you need to save each month to meet a goal.
You might get one rate now, but unless you've fixed your rate, it's likely you won't get the same rate in a year – so you may need to redo the calculation then.
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 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.
Want to complain about your savings provider?
If your savings provider has given you the incorrect interest rate, or you haven't received your interest at all, then you don't have to suffer in silence. It's always worth trying to call your provider first to see if it can help, but if not you can escalate it to the free Financial Ombudsman Service.
This is a commonly asked question but almost every savings account can be set up as a joint account, so actually the question should just be "what is the best savings account?", which this guide is set up to answer.
If you have a business current account, the chances are it pays 0% interest. So any businesses with cash stored, even just to pay the taxman, are missing out on interest.
If you're a sole trader, you're likely to be able to save the business's cash in a personal savings account. It's best to do this, as you get the best rates. But if you've a limited company, then you'll need to use a specially designed business savings account.
We haven't. But sadly there aren't actually any accounts offering inflation-linked savings at the moment.
In fact, currently most savings accounts don't pay more than the rate of inflation. So you're actually losing money, as prices are increasing faster than your savings are growing.
Inflation-linked savings work in a similar way to fixed-rate accounts. Your money is locked away, but you're paid the percentage change in inflation. Usually there is also a fixed amount on top of this rate, so even if inflation becomes negative (deflation), you'd still get some increase on your balance over the term.
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... by next year, it will have grown to £1.02.
Therefore saving has 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 savers.
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. Look at the contrast between inflation and deflation...
When inflation's high...
Suppose inflation is at 5.0% and the best savings account pays 6.5%. 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 £10,650. Yet inflation means the shopping basket has increased in price to £10,500. Thus Sally's spending power has only increased by £150, her real interest rate was just 1.5%.
When there's a deflationary period...
Deflation has set in, with the inflation rate at minus 2%, while savings rates have further slumped too, offering just 1.5% interest. Here, after a year Sally's ten grand has 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.