Top Savings Accounts
0.55% easy access or up to 1.7% fixed
With the Bank of England's base rate at an all-time low, savings rates have been hit hard - though the top-pick rates are now inching up again. So whether you've £1 or £1 million, take action now to ensure you're getting every possible penny of interest on your savings. Below we take you through the maze of accounts to find the most profitable home for your cash – and keep it safe.
What is a savings account? Plus three savings need-to-knows
A savings account is simply an account for you to put money in and earn interest. Where bank accounts have more bells and whistles, letting you withdraw cash, pay bills and use a debit card to spend, savings accounts are solely there for you to earn interest.
Up to £85,000 per person is protected in UK-regulated financial institutions
Every bank we mention in this guide is fully UK-regulated, which means you get £85,000 per person protection in the event it goes bust (£170,000 for joint accounts). The only thing to watch is some providers, eg HSBC and First Direct, share licences so you only have £85,000 protection across both banks. See the Are Your Savings Safe? guide.
Interest from savings is tax-free for most
Savings interest is paid tax-free and most won't pay any tax on it at all. Basic-rate taxpayers can earn £1,000/year tax-free and higher-rate taxpayers £500, so it's only those with very large amounts of savings who would need to worry about this – and that's less than 5% of us. Find full info in our Personal Savings Allowance guide.
Not sure how much interest you'll get? Find out with our Savings Calculator. Simply plug in the rate, and how much you'll save (and if you pay tax on savings interest), and it'll tell you how much you'll earn.
You can split money across different accounts to get a mix of benefits
If you've lots to save, you can open several different savings accounts. For example, if you had £20,000 and you needed £5,000 of it in two months' time, you could stick £5,000 in the top easy-access account, and then put the rest into a one-year fix. If you don't yet know what you want to do with your cash, just stick your money (up to the protected £85,000) in the top easy-access account while you're deciding.
10 tips for choosing the right savings account
There are many different types of savings account and if you're not sure what each one does, the choice can be confusing. Before we get to the top savings accounts of each type, here are some tips to help you decide if saving is the right choice, and if so, where to put your money...
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?
What if I have a 0% card or a really low rate?
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.
Shouldn't I have an emergency fund?
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 sure you'd be 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...
Will I always be allowed to overpay and is there a limit?
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 your lender plans to use your overpayment. Some will reduce the term of your mortgage, so your monthly payments stay the same but you'll pay the mortgage off more quickly. Some lenders will use your overpayment to reduce your next monthly payment (especially if you overpaid a small amount), which only saves you a few days' interest. Ask to reduce the balance to really see the benefit.
If I overpay my mortgage can I access that extra cash again?
Some mortgages allow you to borrow back overpayments. However, this practice is far less common now than it used to be, so it's unlikely you have this. Check your mortgage terms carefully.
Some lenders will allow you to take a payment holiday if you've overpaid – essentially while you're not paying, they'll take money from the overpayment reserve you've built up. It's like a borrow back facility, but means you can only use the cash for mortgage payments. Again, check your terms carefully to see if this is allowed.
Of course, if you have an offset mortgage, where you build up savings to reduce/offset the amount of debt you pay interest on, you can access these savings when you need to. Not sure how this works? Imagine you had a £100,000 mortgage and £20,000 in savings. In this case, with an offset mortgage, you only pay interest on £80,000 of your mortgage debt.
Easy access accounts let you make withdrawals at will (though some do limit the total number you can make per year). They tend to pay lower rates than many other types of account, but are a good place to keep your money if you're going to need it soon (or frequently)
Make sure you keep an eye out for introductory 'bonus' rates. 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 for the bonus and switch as soon as it ends, so you don't languish on a rubbish rate.
A fixed-rate account 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 you'd be unable to ditch and switch to a better payer until your fixed term ended.
The personal savings allowance (PSA) means that most people don't pay tax on their savings. This means that deciding whether or not to put your money into a cash ISA is usually just a question of which account pays the highest interest rate.
If you've used your personal savings allowance (£1,000 in interest if you're a basic-rate taxpayer, or £500 for higher-rate), then it's worth considering a cash ISA as you never pay tax on the interest paid on that.
Read our Top Cash ISAs guide for the current best buys and a full analysis on whether or not you should open one.
Not sure how much interest you'll get? Find out with our Savings Calculator. Simply plug in the rate, and how much you'll save (and if you pay tax on savings interest), and it'll tell you how much you'll earn.
Surprisingly, some banks' current accounts pay a higher rate of interest than their savings accounts, though you tend to only get interest on the first £1,500 or so. Unlike savings accounts, you'll need to pass a credit check to open one.
The Best Bank Accounts guide has the highest paying options.
These are a specific products that let you save around £50-£500 every month (maximum deposits vary by account). The main advantage is they tend to pay higher rates of interest than standard deals. For more details and best buys, see the full Regular Savings Accounts guide.
The Lifetime ISA (LISA) scheme gives first-time buyers a 25% boost to their savings, and should be your first port of call if you're saving for your first home.
Anyone aged 18-39 can open a LISA and save up to £4,000/tax year into it, as a lump sum or by putting cash in when they can. Then the state adds a 25% bonus on top. So save £1,000 and you'll have £1,250.
First-time buyers can use the money and bonus towards the deposits for any residential property costing up to £450,000 once they've held the LISA for 12 months. But be warned – there's usually a 25% withdrawal penalty if you take the money out for anything other than purchasing a first home or for retirement aged 60+ (though this penalty has been temporarily cut). Full info in our LISA guide.
The Government's Help to Save scheme is designed to encourage people claiming universal credit or working tax credits to save. It pays a 50% bonus on the amount saved, up to a maximum bonus of £1,200 over four years.
Our Help to Save guide has full info on the scheme, including when you should and shouldn't go for it.
If you've got children aged under 18, then you can get a specialist savings account for them. Though they tend to mirror adult accounts (in that you can get easy-access, fixed-rate, ISAs etc), some of the current rates actually beat their grown-up counterparts. Plus it can be a great way to teach your kids the merits of saving early.
The main idea with easy-access accounts is that 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. And since the rates are variable, it's worth checking your rate regularly to make sure you're getting the best possible returns.
Coventry Building Society currently pays the top rate of 0.55% – though you're limited to 6 withdrawals per year, so think carefully whether this is the right choice for you. If you'd prefer the flexibility of having unlimited withdrawals, Marcus and Saga (both backed by investment banking giant Goldman Sachs) currently pay a slightly lower rate of 0.5%.
All three accounts can be opened easily online with just £1.
|Top standard easy-access rates. Here are the highest paying traditional accounts.|
|Coventry BS||0.55%||❌ 6/yr (1)||£1/ £250,000||Online||£85,000|
|Marcus*||0.5% (2)||✓||£1/ £250,000||Online||£85,000, shared (3)|
|Saga*||0.5% (2)||✓||£1/ £100,000||Online||£85,000, shared (3)|
|Easy-access savings via other routes (click links to read more)|
|Chip autosave app (4)||1.25% (not compounded)||✓||£1/ £10,000||App||£85,000, shared (5)|
|Virgin Money current account||2.02%||✓||None/ £1,000||Online||£85,000, shared (6)|
|Nationwide current account||2%||✓||None/ £1,500||Online||£85,000|
Remember, cash in all the accounts above is protected up to £85,000 per person, per financial institution. If you've more than £85,000 it's best to spread savings across several different banks just in case one gets into difficulty.
We include them because they often have the best rates, and these accounts may suit some people who might not need to access their savings from one month to the next. But we will always include the top accounts with unlimited withdrawals as well, so you can pick the one that works best for you.
If you have an account that limits withdrawals, check what happens if you make too many. Some will drop the interest they pay if you make too many, others will close the account and transfer it to another account with a worse interest rate.
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.
Bonus rates can be a good thing, as they effectively act as a minimum rate guarantee during the introductory period, promising you at least some interest. Though 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.
Chip+1 savings account pays 1.25% on up to £10,000 (newbies only)
Chip is a savings app you connect to your current account through Open Banking. It's known for autosaving, where it uses an algorithm to work out how much you can afford to save.
Normally these apps don't pay interest, or very little, but its Chip+1 account* (accessible via our code MSE21 – just put it in the VIP box once you've registered) pays 1.25% variable if you're new to Chip. Though there's a lot you need to know before you sign up...
- You can get 1.25% interest on up to £2,000 for free, or up to £10,000 for a fee. The Chip+1 account is made up of two different plans:
- ChipLite. Chip's fee-free plan won't autosave for you, but will pay 1.25% variable on up to £2,000 (0% above).
- ChipAI. The default plan, it pays 1.25% variable on up to £10,000 (0% above) and charges a £1.50 fee every four weeks – though everyone gets a four-week free trial.
ChipAI gives you access to Chip's autosaving features – just make sure you specify autosaves should go to the 1.25% account during sign-up. If you don't want this, you can pause autosaves once you've registered (go to your profile in the app, then 'Auto-save settings' then 'Skip auto-saves' and choose a date – you can pause for up to three months at a time).
- If you've more than £4,600 to save, you'll get better returns with ChipAI. If you've less, putting £2,000 in ChipLite and putting the rest in a top easy-access savings account paying 0.5% works out better.
But anyone with over £4,600 will be better off with ChipAI, once the fee has been factored in. If you can save the full £10,000 with the ChipAI plan, with the fee taken into account, you'll receive an unbeatable effective interest rate of 1.05% in year one.
- It's easy access so you can take cash out when you want, but it's best to time withdrawals. The interest is calculated weekly (on a Tuesday) and is payable every 90 days, but if you close an account before it's paid you get nothing for that period. So withdrawals are best made shortly after interest's been paid, if possible.
The interest's held in a separate account, so it DOES NOT compound (ie, you don't get interest on the interest), but at 1.25% it still dwarfs what others are paying. If you're concerned, you could withdraw the whole balance and interest and redeposit it if you want to get interest on the interest (unless you already have the maximum £10,000).
- The money you put in is fully UK savings-safety protected but the interest you get isn't. Chip has partnered with ClearBank to run its Chip+1 account. As ClearBank has a full UK banking licence, money held there gets the normal UK savings safety protection like other savings.
With the interest, Chip's actually giving you a marketing bonus for saving. And while your balance will update each time interest is paid out, the cash doesn't go into the ClearBank account – it's held separately, in a ring-fenced high-street bank account.
If you want to protect the interest, you'll need to withdraw ALL your savings and interest, then redeposit it all into your Chip+1 account to get the protection (it's not possible just to withdraw the interest and pay that back in).
- To use Chip+1, you'll need to connect your bank account. Chip connects to most (but not all) bank account providers. These are Bank of Scotland, Barclays, Danske, First Direct, Halifax, HSBC, Lloyds, Marks & Spencer, Monzo, Nationwide, NatWest, RBS, Revolut, Santander, Starling, TSB and Ulster Bank.
- What is autosaving? Autosaving apps use clever tech to work out what you can afford to save and then do it for you, er, automatically, moving money from your bank account to a virtual savings account. The idea is that you start building up savings without really noticing the cash is going – useful if you find it difficult to put money aside or don't know how to start saving.
Notice savings accounts
Notice accounts are good for people who know they'll need their money, but don't know when. A good example might be if you are a first-time buyer. You know you'll need your saved cash for the deposit, but you might find your dream home in two months or in 10. A (shortish) notice account would let you get a boosted rate, but would also let you access your cash in time to exchange.
If you're sure you won't need instant access to your cash, some notice accounts currently pay more than the top easy-access account at 0.5%. Which to go for will be determined by how long you'd be willing to wait, as the top rate of 0.85% from Hampshire Trust Bank requires 95 days' notice.
If three months is too long, take a look at the other shorter notice options, though you'll trade in a better rate for the greater flexibility.
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.
But, in general, if you think you might ever need immediate access to your cash, it's much safer to opt for an easy-access account.
In general, the savings provider will give you enough notice that you can withdraw your money if you want to. So for example, if you were in a 95-day notice account, your savings provider would probably give you 95 days' notice, plus a bit more – often a couple of weeks.
Some providers will choose to change the rate sooner than that, but if they do this, they should give you the chance to access and withdraw your money without giving the full notice period required by the account.
With fixed savings you can't withdraw your money until the end of the term, other than in extremely rare circumstances. And in return, you get a better reward - and the rate is guaranteed. This is because the bank gets the certainty of holding your cash for a set amount of time, and in exchange, you get the certainty of the interest rate they offer. Therefore, you should only lock away what you definitely won't need access to.
Rates offered on fixed savings accounts rates (aka 'fixed-rate bonds') have been steadily creeping up over the last few months. If you think that's likely to continue, and you want to fix, it's likely to be better going for a shorter fix, eg, one or two years, so that if rates do rise, you're not locked in at a lower rate for too long. However, if you think rates could fall, fixed-rate accounts offer some protection.
The top rate of 1.01% is currently offered by three banks. Our top pick here is OakNorth Bank, as it has a low minimum deposit of £1 – though there's little else between them, so which you should go for comes down to personal preference.
However, if you don't mind a small amount of risk when it comes to your savings interest, you can beat this rate. Gatehouse Bank pays 1.1% on its one-year fixed sharia account – while this is expected profit rather than guaranteed interest, Gatehouse Bank has always paid this in the past.
|Top standard one-year fixes. Here are the highest paying traditional accounts.|
|OakNorth Bank||1.01%||At maturity||£1 /£500,000||Online/ app||£85,000|
|Vanquis Bank||1.01%||Monthly or at maturity||£1,000/ £250,000||Online||£85,000|
|Oxbury (1)||1.01%||At maturity||£1,000/ £500,000||Online (2)||£85,000|
|Top sharia account. Beats above accounts on rate, but pays expected profit. What does this mean?|
|Gatehouse Bank||1.1%||At maturity||£1,000/ £1m||Online||£85,000|
Two banks currently pay the top rate of 1.22%. App-based Tandem requires accounts to be opened and managed using its app, but has a low minimum deposit of just £1. If app-based banking isn't for you, UBL UK pays the same rate and accounts can be opened and managed online, by post or in branch – though a minimum deposit of £2,000 is required. UBL UK also allows joint applications.
However, if you don't mind a small amount of risk when it comes to your savings interest, you can beat this rate. QIB pays 1.25% on its two-year fixed sharia account – while this is expected profit rather than guaranteed interest, QIB has always paid this in the past. Plus, newbies to savings marketplace Raisin saving £5,000-£85,000 can claim £10-£100 in bonus cashback on top.
|Top standard two-year fixes. Here are the highest paying traditional accounts.|
|Tandem (1)||1.22%||At maturity||£1/ £2.5m||App||£85,000|
|Vanquis Bank||1.22%||Monthly or annually||£1,000/ £250,000||Online||£85,000|
|UBL UK||1.22%||Monthly or at maturity (3)||£2,000/ £1m||Online/ app/ post/ branch||£85,000|
|Top sharia account. Beats above accounts on rate, but pays expected profit. What does this mean?|
|QIB via Raisin||1.25% + £10-£100 bonus for some||Annually||£1,000/ £85,000||Online||£85,000|
We've included the top three-year and five-year fixes below. You can get better rates if you lock in for longer, but you'll need to weigh up whether it's worth it. What you gain in certainty you give up in flexibility, since you won't be able to access your money, even if rates rise during the term.
For three-year fixes, two banks currently pay the top rate of 1.36%. App-based Tandem requires accounts to be opened and managed using its app, but has a low minimum deposit of just £1. If app-based banking isn't for you, UBL UK pays the same rate and accounts can be opened and managed online, by post or in branch – though a minimum deposit of £2,000 is required. UBL UK also allows joint applications.
JN Bank is the top pick for five years, paying 1.7% on balances of £1,000 or more, and its account can be opened online or by phone.
Three-year fixed rates
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 their expected rates in the past.
The accounts are open to anyone, of any faith, and the ones above 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.
It's difficult to say. After a period of falling interest rates, following the Bank of England cut ting base rate to a historic low of 0.1% in March 2020, fixed savings rates are currently on the rise.
For larger sums, fixes pay higher rates and give certainty. So the more you value certainty and the easy life of being able to put money away and leave it, the more you should consider fixing.
If you are thinking of locking in, we'd hedge towards shorter fixes, as then - if rate rises continue - you don't lose out for long if you've fixed at a lower rate.
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 continue to rise 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 a few banks 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.
Boost fixed-rate savings interest
With interest rates so low, we've a way of boosting the returns you get – but it's a bit more complicated than opening a standard savings account...
Raisin is a 'savings marketplace', which means it offers savings accounts from various banks it partners with. It also offers cashback to newbies who save at least £5,000 (its max per account is £85,000).
Open your first account through it and you can claim a £10 bonus if you deposit £5,000-£39,999, £50 on £40,000-£74,999 or a £100 bonus if you've £75,000-£85,000. See full claim instructions.
Both accounts below have £85,000 UK savings safety protection and are available to individuals only – Raisin doesn't currently offer joint savings accounts.
Two-year fixed accounts
- QIB* 1.25% AER 'expected profit', paid at maturity.
Three-year fixed accounts
- QIB* 1.3% AER 'expected profit', paid at maturity.
Important. Annoyingly, you have to claim the bonus. See full instructions below.
- Sign up online to Raisin.
- Open a savings account through Raisin.
- Pay in at least £5,000 to that account within 60 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. 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.
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 Financial Services Compensation Scheme (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 the bank offering the account you've chosen. It's then covered by that bank'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 (between leaving your Raisin UK account and arriving with the end bank, it's via RBS's protection).
We only feature UK-protected accounts in this guide, but 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.
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...
This is a commonly asked question, but most savings accounts can be held by two people – so actually the question should just be: "What is the best savings account?", which this guide is set up to answer.
Except where noted, each of the accounts above can be set up as a joint account – so if you're looking to save with someone else, just head to our top easy-access accounts, top notice accounts and top fixed-rate accounts.
Where an account can't be opened jointly, we've highlighted this in the relevant table.
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.
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.
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' account, not a savings account.
What about deflation?
Of course, sometimes prices drop – as happened in 2009 – and you get negative inflation, known as deflation. This can sometimes be a positive for savers.
Imagine inflation is minus 2%... Things costing £1 this year will then cost 98p next year.
You have £1 in a savings account. The interest rate has fallen to 1%... Despite the lower rate, by next year your savings will have grown to £1.01.
Therefore, saving has increased your spending power by 3p/pound... Even though the interest rate has plummeted, you're 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.
Clever ways to calculate your finances