Top savings accounts
Easy access, fixes, when to save, how to pick, savings tax & more
There are many different types of savings accounts, and you can pick ‘n’ mix as many as you want to combine terms that suit you and to max your interest. If you're new to saving, or are unsure what to go for, read this guide in full as it'll help you decide if you should save, and if so how best to do it. Or, if you know what you're doing, you can use the links below to jump straight to our best buys for easy-access or fixed savings.
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Easy-access savings: allows unlimited withdrawals
Cahoot (part of Santander) – 5% on up to £3,000
Trading 212 – 4.76% on up to £20,000/year (top cash ISA)
Chase (part of JP Morgan) – 4.5% on up to £3m -
Fixed term accounts: must lock cash away
MBNA (part of Lloyds) – 4.85% for one year
Marcus (part of Goldman Sachs) – 4.6% for one year (with access if needed)
Recognise Bank – 4.85% for two years
Related guides: If you're looking for something else...
Cash ISAs | Help to Save | Lifetime ISAs | Regular savings | Children's savings | Investing
Martin Lewis: three key things to consider before saving
While building up savings, especially for emergencies, is a crucial aim for everyone, it isn't necessarily always the first thing to do…
1. Saving is investing’s poorer cousin - should you be investing? The first place to put spare money is always to build up a cash emergency fund of three to six months' worth of bills. But for money you won’t use for 5+ years, saving isn’t usually the winner. It's worth considering putting some of the rest in a broad spread of investment (eg, a global tracker fund that mirrors the performance of a huge range of companies). Do read my new Beginners guide to investing.
2. Got costly debt? It's usually best to use spare cash to clear it first, after all pay off a grand’s on a credit card at 25% APR rather than save at 5% and you’re £200 a year better off. See Should I pay debt with savings?
3. Is overpaying your mortgage a better way to save? If your mortgage rate is the same or higher than you earn in savings, check our Mortgage Overpayment Calc to see if it may be worth you overpaying. If it looks likely, read Should I overpay my mortgage? for full pros & cons.
New to saving? Need help choosing what to go for?
There are many different types of savings accounts which can suit different circumstances and preferences. This section of the guide runs through the main types, to help you decide which works best for you. But as a first step, if you're not sure what to do with your savings, at least put it in the top easy-access account while you take time to work it out...
Know what you're doing? You can jump straight to our easy-access & fixed savings best buys.
The basic savings building blocks are easy-access and fixed savings...
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Easy-access: Put money in and take it out whenever you want. Rates are variable, so they move, often with Bank of England base rates, so keep an eye out (and be prepared to ditch and switch if needed). If you do nothing else, put all cash you don't imminently need into one of these. See easy-access for more info, including best buys.
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Fixed savings: Lock your money away in return for a guaranteed rate. Since you can’t access your money, only put away what you definitely won’t need within that time. And remember, if rates rise elsewhere, you'll be stuck with the fixed rate until it ends. See top fixes for full info & options.
There's another type of savings, which can act as a hybrid between easy-access and fixes...
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Notice accounts: Must give notice and then wait before you can access your cash. Rates are variable, like easy-access, though the rate can be guaranteed for at least the length of the notice period if it were to fall. So you get short-term rate security (typically 30 to 120 days). Not all notice accounts work like this, but we only include ones that do.
Historically the lack of flexibility was in return for a rate boost above easy-access... though right now notice rates are lower, so for most people they're not worth it, unless you really want to hedge against future rate cuts. See Notice accounts for full info & options.
You can get all of these as 'normal' savings, or as cash ISAs - the differences between the two and how to choose
ISA stands for Individual Savings Account. It's simply an account for your savings (or investments) where your interest (or investment returns) are tax-free forever. There are a few different types, though a cash ISA is just a savings account where the interest is NEVER taxed.
Each tax year, anyone aged 18+ can put £20,000 in total into ISAs. This is the total limit on the combined amount you can put in to a cash (savings) ISA, or a shares (investment) ISA, or a lifetime (first-time buyer) ISA (max £4,000). You can put all £20,000 in either cash or shares, or split it across a combination of the three.
But this is the last tax year where many will be able to put the full £20,000 in a cash ISA. From April 2027, it's planned that the annual cash ISA limit will fall to £12,000 for under-65s. The shares ISA will remain at £20,000.
How do normal savings and cash ISA rates compare?
Normal savings usually pay higher rates, but depending on how much you save, you may pay tax on your savings interest. Cash ISAs usually pay lower rates, but shelter your interest from savings tax. So if you currently pay tax on your savings interest, go for a cash ISA.
But even if you don't pay tax on your savings interest, easy-access cash ISAs currently outpay normal savings, so they're clear winners anyway. See Top easy-access cash ISAs for full info.
How about fixed cash ISAs? Is it better to fix in normal savings or in a cash ISA?
Normal fixed savings pay more, so as long as you won't pay tax on your savings interest, they win. Yet if you will, or may in future earn over your Personal Savings Allowance (£1,000 a year interest for basic 20% rate taxpayers; £500 for higher 40% rate; none for additional rate), then fill up a cash ISA as the interest is tax-free, which means, overall, you'll get more.
Plus, while most normal fixed savings lock your money away, cash ISA fixes can't do that. They must allow you to access your cash in return for an interest penalty. So, if there is even a small chance you might need to dip in, go for a fixed cash ISA.
Planning to save for a longer period (eg, at least five years)?
If you're planning to save for the longer term, then investing in a broad spread of investments is likely to vastly outperform saving. If you plan to invest, do it via a shares ISA to shelter your returns from various taxes, including capital gains tax and dividends tax.
See our Beginners guide to investing and shares ISA guide for full help.
If you've maxed your ISA allowance, Premium Bonds could be worth considering.
Premium Bond returns are tax-free, but they work differently to other types of savings. For a full explanation, listen to Martin's is it time to ditch Premium Bonds? podcast, or see our Premium Bonds: Are they worth it? guide.
How much do I need in savings before I start paying tax on the interest?
Right now, basic-rate taxpayers need to save around £20,000 at the top easy-access rate to start paying tax on savings interest (£10,000 for higher-rate). If you're nearing this limit, you should go for a cash ISA for its extra tax-free allowance.
This is much less than you needed a few years ago. Look at the graph below. It shows how much you needed in top easy-access (and two-year fixed) savings before you'd start paying tax on the interest – for easy-access it's fallen from over £200,000 five years ago, to just around £20,000 today, for a basic-rate taxpayer.
How does tax on savings interest work?
There are three big allowances which mean, even outside an ISA, most don't pay tax on savings interest. Full info in How savings tax works, but in brief the three allowances are...
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Personal Allowance: The £12,570/year you can typically earn from any source (work, interest etc) before paying tax.
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Starting Rate for Savings: This lets some lower earners have up to £18,570/year of untaxed earnings and interest combined.
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Personal Savings Allowance (PSA): Lets most earn some savings interest tax-free each year. It’s £1,000/year of interest for basic 20% taxpayers and £500/year at the higher 40% rate (none at the additional 45% rate).
You should also watch Martin's video explainer on how savings tax works.
Three SPECIALIST rate boosters. Check if you can get them.
These are absolutely worth looking at, as if you can get any of them, they're more lucrative than what we've covered so far. The catch? They either limit who can get them, or how much you can put in. In order of maximum returns...
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Help to Save: A 50% boost on what you save, if you work & are on Universal Credit. Here you can save up to £50/month, and after two years, you get a 50% bonus based on the highest balance you reached – even if you’d withdrawn the money. You can then repeat it for another two years for a second 50% boost. Full info in Help to Save.
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Lifetime ISAs (LISA): A 25% boost for (wannabe) first-time buyers aged 18 to 39. This is a tax-free savings or investment account anyone aged 18 to 39 can open (once open, you can keep it going even after you're 40). Its primary use is to help first-time buyers build a deposit, though it can also be used to save towards older age. It's complex, so read full info in Top Lifetime ISAs.
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Regular savings: Earn over 7% on smaller amounts. These pay higher rates but limit how much you can pay into them each month. The best rates are usually linked to current accounts (ie, you must have a provider's current account to open it). Most usually last a year and many prevent or limit withdrawals. You can have multiple at the same time, so you can drip-feed lump sums into these to max your interest. Full info in Regular savings.
What about children's savings?
There are two main types of children's savings – they're suitable for different purposes, and there is no problem having both.
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Standard children's savings. Interest isn't tax-free, though that's not usually an issue as most children don't pay tax. Rates are helped by the fact the maximum amounts that can be saved usually aren't high, making it cheaper for banks to offer them (in the hope they may end up buying a small person's custom for life). See Top children's savings for more.
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Junior ISAs. You can save or invest £9,000 each tax year in a Junior ISA, though the cash is locked away until the child turns 18. If you save in a junior cash ISA the interest isn't taxable; if you invest via a shares junior ISA, any income or capital gains on the share growth is tax-free. But while this is a valuable extra protection, most children don't pay tax anyway, so in practice it's not relevant for most (click the link for full info).
Which type of children's savings should I go for?
There's a strong argument to invest rather than save for your child, especially if they're young. The general investment rule is if you're putting money away for over five years (and you've got no expensive debts and have an emergency fund), then on the balance of probability, investing will likely significantly outperform saving.
With junior ISAs you're often putting money away for far longer periods: it should, hopefully, mean much greater growth, even more than the top savings account. So putting some money in there (or in other investments) is often a good idea. You can have both a cash junior ISA and a shares junior ISA, as long as you don't put over £9,000 in per tax year.
How safe are savings?
Every bank or building society in this guide is fully UK-regulated and covered by the Financial Services Compensation Scheme (FSCS). From 1 December 2025, the amount protected if a provider goes bust increased from £85,000 to £120,000 per person, per institution (or £240,000 for joint accounts). If you're unsure if a bank is covered, the FSCS has its own savings protection checker which will tell you. Do check.
Some banks share a licence, meaning the £120,000 limit is shared across multiple banks. You can use our Which banks are linked? tool to check. See Are your savings safe? for more info.
Try our new Savings Picker
We’re testing our brand-new Savings Picker to help you figure out which type of savings account might work best for you – and we’d love your feedback.
Answer 7 quick questions – We’ll get a feel for where you're at with saving.
Get real-time pointers – As you go, we’ll explain what your answers mean for your Savings Strategy.
Explore your best match – When you're done, we’ll highlight which types of savings accounts could suit you – and which might not.
This tool is new, so use it & let us know your thoughts. Once you’ve got your results, visit our Savings Hub for the latest rates and share any feedback on the MSE Forum.
Top easy-access savings
With easy-access accounts, you pay in cash, earn interest while it's in there (which is paid each month or year) and can withdraw whenever you like. Some accounts do limit how often you can withdraw in return for a boosted rate – we highlight if this is the case.
Rates here are variable, meaning they can rise or fall at any time. Providers must notify you of any change, but you should regularly check the table below for the current top payer anyway. If your account is lagging, simply move your cash over to the latest top rate.
Easy-access accounts – what we'd go for
The benchmark rate you should be getting is from Chase at 4.5%* with unlimited withdrawals on up to £3m. This includes a 2.25% one-year bonus for newbies only. You first need to open its free top-pick current account (it's quick, you needn’t switch or use it & only requires an ID check, not a full credit check, so doesn’t impact your credit worthiness). If you've already got it and the bonus is over, ditch it as the rate isn't good.
You can get higher rates with accounts that have lower deposit limits. Cahoot's (part of Santander) 5% Sunny Day Saver pays the top rate in the market on up to £3,000 (you can add more, you just don't get any interest on it). Or there's on up to £20,000. This includes a 1.55% one-year rate bonus that's paid after a year (so if the rate drops, just take everything but £1 out and you’ll still get the bonus for the time you had the real amount in there).
You can also get very decent rates with cash ISAs, which are just savings accounts where the interest is never taxed. Even if you don't earn enough interest to pay tax, just use it for normal savings as the rates are higher than above (except Cahoot). You can put up to £20,000 into these each tax year. Top is and top for ISA transfers is . Both include a one-year newbies' bonus and can be opened with £1.
If you don't want an account with a one-year bonus, the top totally straight rate comes from Hampshire Trust Bank at 4.2% on up to £250,000.
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Top savings accounts (all have full £120k protection) |
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Top cash ISAs currently pay the highest rates.Cash ISAs are savings accounts you never pay tax on, if you've not yet used your £20k annual allowance, we'd start here. |
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Top cash ISA
, 4.76%
- 3.6% variable + 1yr 1.16% bonus
- Min. £1,
Max. £20,000 each tax year
- Open online or via app
- Interest paid: monthly
- Is a |
Top cash ISA for transfers
, 4.75%
- 3.45% variable + 1yr 1.3% bonus
- Min. £500,
Max. £20k a yr
- Open online or via app
- Interest paid: annually
- Is not a |
Top normal accounts(In rate order – see what we'd go for above) |
Top well-known name accounts(As many tell us you prefer names you know) |
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Earn 5% but only on up to £3,000 - Account lasts 1yr (but rate is variable)
- Min. £1,
Max. £3,000
- Open online
- Interest paid: monthly or annually
- Sole or joint accounts |
Max 3/yr withdrawals - Can make withdrawals on 3 days of your choice each year
- Min. £1,
Max. £500,000
- Open online
- Interest paid: annually
- Sole or joint accounts |
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Earn 4.55% on up to £20,000
, 4.55%
- 3% variable + 1yr 1.55% bonus (account must be open 1yr to get the bonus, so if rate falls, move your cash but keep a min £1 saved)
- Min. £10,
Max. £20,000
- Open via app
- Interest paid: monthly (bonus paid after 1yr)
- No joint accounts |
- Account lasts 1yr (but rate is variable)
- Min. £1,
Max. £500,000
- Open online
- Interest paid: monthly or annually
- Sole or joint accounts |
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Top on large amounts via free, easy-to-open current account
, 4.5%
- 2.25% variable + 12mth 2.25% bonus
- Min. £1,
Max. £3m
- Open via app
- Interest paid: monthly
- No joint accounts |
Tesco Bank, 4.16%
- 1.05% variable + 1yr 3.11% bonus
- Min. £1,
Max. £1m
- Open online
- Interest paid: annually
- Sole or joint accounts |
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Top no fuss savings rate
Hampshire Trust Bank, 4.2%
- Min. £1,
Max. £250,000
- Open online
- Interest paid: annually
- Sole or joint accounts |
Post Office, 4.15%
- 0.9% variable + 1yr 3.25% bonus
- Min. £1,
Max. £2m
- Open online
- Interest paid: monthly or annually
- Sole or joint accounts |
Ways to boost your interest.Some non-standard accounts pay higher rates. |
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Requires you to actively use its £3/mth current account
, 6%
- Requires its current account (click for info)
- Min. £1,
Max. £4,000
- Open online, via app or in branch
- Interest paid: monthly
- No joint accounts |
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All rates are AER. Santander and Cahoot, and Tesco Bank and Barclays Bank, share FSCS protection. |
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Can’t I just get a long-term consistent rate account?
For that you need a fixed rate account, which we'll come on to next. Yet there you sometimes have to lock your money away. For easy access, to maximise the interest, you must be an active saver. Yet that can just mean checking your interest rate a couple of times a year, and withdrawing it and opening a new account if the rate is bad.
Bigger savers, with multiple accounts, may find savings hubs where you can move accounts between a panel of firms with just a click, far less hassle.
Top fixed-term savings accounts
With fixed savings you can't usually withdraw your money until the end of the term, but the interest rate is guaranteed. The advantage of fixes is that you know the rate, and it sticks even if UK rates were to drop. The disadvantage is that, in addition to the money being locked away, if rates rise elsewhere you’re stuck until the fix ends.
Want early access? Unliked savings fixes, fixed cash ISAs must by law allow early access to your cash in exchange for an interest penalty. Fixed savings and cash ISA rates are similar right now, so if there's even a small chance you might need to dip in, go for a cash ISA.
Want a short-term rate guarantee? While our focus is on one, two, three and five-year fixes, below those we've also included fixes of less than a year, as well as notice accounts, which can both give short-term rate security, if that's what you're after.
Fixed-rate savings accounts – what we'd go for
Rare one-year fix locks in rate, but unusually lets you withdraw if needed. The Marcus (part of Goldman Sachs) 4.6%* one-year fix lets you close the account, without notice, to withdraw, and you just lose up to 90 days' interest. So it’s a strong choice if you want the flexibility to access your money early.
Fixed cash ISAs also allow early access (usually for a similar interest penalty) and have the added benefit of sheltering your savings interest from tax. For comparison, the top one-year fixed ISA currently pays 4.67%.
Big name pays top one-year fixed rate. MBNA (part of Lloyds) pays 4.85% for one year. This is a standard fix, where you lock your money away without access, in return for a guaranteed rate of interest.
Want to fix longer? Recognise Bank is top for two years at 4.85%, while Oxbury Bank is top for three and five years at 4.83% and 4.88%, respectively.
Do you bank with Nationwide? Existing customers can get a 15-month fix from Nationwide at 5% on up to £10k.
Top one-year fixed savings
| Provider | Rate (AER) | When can I access interest? | Min/max deposit | How to open? |
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Top one-year fixes. Marcus' (part of Goldman Sachs) 4.6% one-year fix lets you access your cash early for an interest penalty. The flexibility is likely worth the small sacrifice in rate for many. |
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| MBNA (part of Lloyds Banking Group) | 4.85% | At maturity | £1,000 / £750,000 | Online (manage via phone only, no joint accounts) |
| Recognise Bank | 4.85% | Monthly or at maturity | £1,000 / £250,000 | Online |
| Thisbank | 4.82% | At maturity | £100 / £500,000 | Online (no joint accounts) |
| Marcus (part of Goldman Sachs) - allows early access for a 90-day interest penalty* | 4.6% | At maturity (1) | £1 / £250,000 | Online |
Existing Nationwide customer? You can grab a market-leading fix on up to £10k. |
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| Nationwide (existing customers only) | 5% for 15 months | At maturity | £1 / £10,000 | Online/ app |
Ways to boost your interest. Beat or match rates above via an 'online savings marketplace'. |
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| 4.86% | At maturity | £10,000 / £1m | App (no joint accounts) | |
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All have Financial Services Compensation Scheme savings protection of up to £120,000. (1) You can't withdraw from this account, but can ask to close early in exchange for 90 days' interest (or all interest earned if account has been open for less than 90 days). |
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Top two-year fixed savings
| Provider | Rate (AER) | When can I access interest? | Min/max deposit | How to open? |
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Top two-year fixes. In rate order. |
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| Recognise Bank | 4.85% | Monthly, annually or at maturity | £1,000 / £250,000 | Online |
| Hodge Bank | 4.83% | Monthly, annually or at maturity | £1,000 / £1m | Online (no joint accounts) |
| GB Bank | 4.82% | Monthly, annually or at maturity | £1,000 / £100,000 | Online |
Top rates from big names. As we know some prefer to save with these. |
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| Coventry Building Society | 4.7% | Monthly (paid away), annually or at maturity (on 31 Aug 28) | £1 / £1m | Online/ app/ phone/ post/ branch |
| NS&I | 4.48% | Monthly (paid away) or annually (paid into the account) | £500 / £1m | Online |
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All have Financial Services Compensation Scheme savings protection of up to £120,000. |
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Top three-year fixed savings
| Provider | Rate (AER) | When can I access interest? | Min/max deposit | How to open? |
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Top three-year fixes. In rate order. |
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| Oxbury Bank | 4.83% | At maturity | £1,000 / £500,000 | Online / app (no joint accounts, need app to manage) |
| Thisbank | 4.82% | At maturity | £100 / £500,000 | Online (no joint accounts) |
| Hodge Bank | 4.81% | Monthly, annually or at maturity | £1,000 / £1m | Online (no joint accounts) |
Top rates from big names. As we know some prefer to save with these. |
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| Coventry Building Society | 4.75% | Monthly (paid away), annually or at maturity (on 31 Aug 29) | £1 / £1m | Online/ app/ phone/ post/ branch |
| NS&I | 4.45% | Monthly (paid away) or annually (paid into the account) | £500 / £1m | Online |
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All have Financial Services Compensation Scheme savings protection of up to £120,000. |
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Top five-year fixed savings
| Provider | Rate (AER) | When can I access interest? | Min/max deposit | How to open? |
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Top five-year fixes. In rate order. |
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| Oxbury Bank | 4.88% | At maturity | £1,000 / £500,000 | Online / app (no joint accounts, need app to manage) |
| GB Bank | 4.87% | Monthly, annually or at maturity | £1,000 / £100,000 | Online |
| Hodge Bank | 4.86% | Monthly, annually or at maturity | £1,000 / £1m | Online (no joint accounts) |
Top rates from big names.As we know some prefer to save with these. |
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| NS&I | 4.4% | Monthly (paid away) or annually (paid into the account) | £500 / £1m | Online |
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All have Financial Services Compensation Scheme savings protection of up to £120,000. |
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Top shorter fixes & notice accounts
We've two options if you're after shorter-term rate security...
1. Fixing for six or nine months. Though rates here are lower than all the longer fixes above, and also lower than the top easy-access rates. So, they're not currently very compelling.
2. Notice accounts. We only include notice accounts which give the account's full notice period before any rate cuts kick in, so you benefit from a higher rate for longer (compared to easy-access, where you'd get the lower rate immediately). Historically notice rates have outpaid easy-access, but right now they're lower, so for most people they're not worth it.
| Provider | Rate (AER) | When can I access interest? | Min/max deposit | How to open? |
|---|---|---|---|---|
Top shorter-term fixes. In rate order. |
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| Union Bank of India UK* | 4.45% for nine months | At maturity | £1,000 / £480,000 | Online |
| Hampshire Trust Bank | 4.37% for six months | At maturity | £1 / £250,000 | Online |
Top notice accounts. Here you'll have to give notice before you withdraw. |
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| Castle Trust Bank | 4.2% for 120 days' notice | Annually, paid into the account | £1,000 / £500,000 | Online |
| Oxbury Bank | 4.16% to 4.18% for 35, 65 OR 90 days' notice | Monthly, paid into the account | £1,000 / £500,000 | Online/ app (no joint accounts, need app to manage) |
Ways to boost your interest. Decent rates from online savings platforms. |
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| 4.5% for a six- OR nine-month fix | At maturity | £10,000 / £1m | App (no joint accounts) | |
| 4.17% to 4.2% for various notice accounts | Daily, paid into the account and annually, paid away | £10,000 / £120,000 OR £1m | App (no joint accounts) | |
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All have Financial Services Compensation Scheme savings protection of up to £120,000. |
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Is now a good time to fix? How long should I fix for?
Fixed rates have jumped considerably since the start of the Middle East crisis, as they are set based on predictions of future UK interest rates. They were expected to drop, but aren’t now. In early March, the top one-year fix was 4.23%, now it's 4.85%.
After these recent rises, there’s now very little difference between the top rates for one-year and three-year fixes. To an extent, you can take that as the market suggesting it doesn't think rates will drop much anytime soon.
With that taken out of the equation, ultimately, guessing further into the future in our volatile world is impossible. So rather than basing it on externalities, look inward. The more you value certainty, the longer you should fix for.
Though a reminder: if you can lock cash away for a long time, say 5+ years, have an emergency fund and no debt issues, on the balance of probability investing your money in a broad spread of assets should substantially outperform saving (watch how sensible investing returns compare to savings), and do read my Investing for beginners guide.
How interest is paid can impact how much tax you'll pay.
Interest crystalises for tax the moment you can access it. For fixes longer than a year, choosing to receive your interest monthly or annually, rather than at the end of the fix, can massively reduce your tax bill by spreading your interest over multiple tax years.
Though if the interest is paid out of the fix, it won't compound, so you'll not earn interest on the interest. If you leave it in, it will. Full info in when should I choose to have interest paid?
Savings Q&A
What is a savings account?
A savings account is simply a place for you to put your money and earn some interest.
Savings interest will be paid to you tax-free and many savers won't pay any tax on the interest they earn. Basic-rate taxpayers can earn £1,000 a year in interest tax-free, and higher-rate taxpayers £500, because of the personal savings allowance (PSA).
At the current top easy-access rate, you'd need around £22,000 in savings to reach this allowance, and soon have to pay tax, as a basic-rate taxpayer. If you're nearing this limit, it's worth considering a cash ISA, as interest on these is always tax-free (and doesn't count towards your PSA).
I've chosen an account, how much interest will I earn?
Use our nifty Savings Calculator to find out. Simply put in the rate, how much you'll save and how long for and it'll tell you how much you'll earn.
We also have a Regular Savings Calculator – it'll tell you how much you'll earn by drip-feeding into a top regular saver.
When should I choose to have my interest paid?
For some accounts you can choose for interest to be paid out to an external account (for example, your bank account), while others pay the interest back into the account itself.
You can often choose how often interest is paid too, for example monthly or annually, or for a fixed-term account, even at the end of the fixed term (at maturity).
Your choice can have a significant impact, as it's when you can ACCESS the interest that matters for tax reasons, which is not necessarily the same time as when the bank pays interest.
Here's an example to help explain...
Imagine you save £10,000 in a five-year fix which pays 4.5%.
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Option 1: Interest is paid out of the savings account to your bank account each year, meaning you can access it when it's paid.
Here, you'd earn £450 each year for five years. As you'd be earning less interest than the basic- and higher-rate personal savings allowance (PSA) limits (£1,000/year and £500/year respectively), you'd pay no tax on the interest.
After the five years, you'd have earned a total of £2,250. -
Option 2: Interest is paid back into the fixed account each year, and you can't access it till the account matures.
Here, you'd earn interest on your interest, meaning that after five years you'd have earned £2,460 – about £200 more than with the first option. However, because you can't access the interest until the end of the five-year fixed term, all the interest counts towards the fifth year's PSA, and far exceeds both the basic- and higher-rate limits. This means you'd have to pay tax – about £292 for basic-rate taxpayers, £784 for higher-rate.
This means that, overall, basic-rate taxpayers would be £80 worse off than with the first option, higher-rate taxpayers a massive £570 worse off.
When is it beneficial to choose monthly or annual interest?
So some may want to have interest paid out to a bank account monthly or annually, so it's spread out over multiple tax years. This can be a particularly good idea if your annual earnings are near an income tax band, where receiving a lump sum interest payment would push you up into a higher band. If this happened, two things happen simultaneously, which would mean you'd be significantly worse off...
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Your PSA would plummet (from £1,000 to £500 if you moved from a basic-rate taxpayer to higher-rate, or from £500 to £0 if you moved from higher to additional). So you'll pay tax on much more of your interest.
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The tax rate you do pay on (a portion of) your interest increases. It'll double from 20% to 40% if you move from a basic-rate taxpayer to a higher-rate, or from 40% to 45% if you moved from higher to additional).
However, there are times where it could be advantageous to have all your interest paid at the end of a fix, for example, if you're retiring and would then become a lower taxpayer when you receive the interest.
How do I know when my interest is accessible?
It's complex, so check with your savings provider about when you can access the cash, then call HM Revenue & Customs on 0300 200 3300 (call charges may apply) so it can help you declare the income for tax purposes in the right year, if you need to.
It's also a good idea to get independent tax advice, as there are so many variables and what you do and don't pay tax on will depend on other savings and income you have. See how to find a financial adviser.
How do inflation and deflation affect my savings?
To really know how well your savings are doing, you have to look at it compared to the rate of inflation. Inflation is the measure of the rate at which prices increase, so if savings don't beat inflation after tax, they're losing you money.
Are your savings 'losings'? (Spoiler: for many, yes)
A savings account that pays less than the rate of inflation is eroding your wealth. Big banks often pay no (or very little) interest on their standard savings accounts, which many linger on, thinking it's not worth the hassle of moving their savings elsewhere. In which case your savings are 'losings'.
Inflation has been volatile in recent years, though it's come down massively from the highs of 2021-2023, so it's now absolutely possible to find savings that beat inflation.
Here's an example using simple numbers of how inflation and interest interact...
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Imagine inflation is 10%. Things costing £1 this year will then cost £1.10 next year.
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You have £1 in a savings account at 5% interest. By next year, it will have grown to £1.05.
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So, saving has reduced your spending power by 5p per £1. 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.
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Imagine inflation is minus 2%. Things costing £1 this year will then cost 98p next year.
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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.
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So, saving has increased your spending power by 3p per £1. 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.
Why list AER interest when not all fixes pay it?
We list the AER (annual equivalent rate) as it's the best way to compare rates.
Savings accounts pay interest in different ways. Most pay interest into the fixed account itself, meaning you get interest on that interest as time goes on.
But a few banks pay interest into separate accounts, meaning you don't earn interest on the interest, and so the actual rate of interest you get is slightly lower than the AER.
You might then be thinking that getting your interest paid into your fixed account is a no brainer, but it's complicated, but it could mean you end up paying more in tax.
How do I complain about my 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 use free complaints tool Resolver.
The tool helps you manage your complaint, and if the company doesn't play ball, it also helps you escalate your complaint to the free Financial Ombudsman Service.
What are online savings platforms?
Savings platforms offer accounts from various banks that they partner with – often at higher rates than are available direct with that bank. Essentially it's a way to easily switch between accounts, though rates are not always as good as those we've mentioned above. Big names include Raisin, Flagstone and Hargreaves Lansdown Active Savings, though recently we've seen decent rates from Meteor and Prosper, too.
Are my savings safe?
In short, yes. But how it works in practice is different for each savings platform. We've full info for all the platforms we feature in this guide: | | | .
If you take out a fix with a savings platform, you'll need to take action when it ends.
You'll be emailed before your fixed term ends asking what you want to do with the money. You can choose to get it paid back into your bank account or to open another product with the savings platform – remember, it won't necessarily offer the best rates at that point, so do check. Do nothing, and the money will usually go back to your "hub account" – so make sure you respond to the email or it'll be sitting earning zero interest.
What happens if things go wrong?
If you have any issues with your account, you need to contact the savings platform directly. You can contact all the providers we list by email, phone or secure messaging when logged in online. Raisin has links with about 40 banks, Hargreaves Lansdown has about 20, and Flagstone around 65. This means their offerings are not whole-of-market – so they won't always offer the top rates. Before you sign up to a new account through these platforms, check this guide to see if the rate can be beaten.
Do you pay tax on introductory cash bonuses?
Cashback bonuses are not treated as savings interest income, so are not subject to the same tax. This means if you receive a cash bonus (eg, via a savings platform), it won't count towards your personal savings allowance, and if you've already exceeded your allowance or are an additional rate taxpayer, it won't be taxed.
Can I open an account through Power of Attorney?
Not all providers will let you open a new account on another person's behalf through Power of Attorney. For those that do, in most cases, you will need to contact the provider's customer support line to open a new Power of Attorney account as well as provide relevant documentation.
We have listed below some providers who consistently appear on our savings guides who explicitly allow new accounts through Power of Attorney. Take a look at some of these providers and compare the rates to the ones in the tables above to get as close to a competitive rate as possible.
If you found an account you would like to open on someone else's behalf, try searching the FAQs for a specific Power of Attorney page or ring the provider's customer support line. Note that some providers have stipulations such as requiring sole signatories.
These providers DO let you open a new account through Power of Attorney:
For full information on registering a Power of Attorney with your bank, or opening new accounts on behalf of a donor, see our guide Which bank is best if you have Power of Attorney?
How do sharia-compliant accounts work?
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 £120,000 per person, per institution savings safety protection. Sharia banks also follow a rule not to invest in areas such as gambling and alcohol.
Do any current accounts pay interest?
Surprisingly, some banks' current accounts (or their linked savers) pay higher rates than many savings accounts, and the top ones can even match the top easy-access rates. Though you tend to only get the interest on smaller amounts, often the first £4,000 or so. And unlike savings accounts, you'll usually need to pass a credit check to open one a current account.
These used to be a lot more popular a few years ago, though there are still some decent options. See Best bank accounts for full info and options.
What are green savings? Are they any good?
Green savings do exist, though you'll usually need to accept a much lower rate of interest, so there's usually a trade-off between interest and green credentials.
As a MoneySaving website, the most important thing for us is rate, so we always include accounts with the highest interest rates in each category in this guide, regardless of which bank or building society offers them.
In some cases, the best buys can change several times a day, and we don't have the resources to forensically check each savings provider to see what it is (and isn't) invested in, or what lending it uses savings balances to fund.
Yet if green savings are important to you, we have a separate Green savings guide, where we do look at the banks and building societies that promise to help the environment or to use your savings to help fund green initiatives.
We also have a broader Ethical banking guide, which provides a good starting point if you're looking for an account that backs good causes, or at least avoids 'bad' ones
How do savings providers make money?
Deposited cash can provide banks with a variety of pathways for making money, including generating interest by holding reserves with the Bank of England, through partnerships and by offering loans at higher interest rates than those they give to savers. For more info, we've a full guide on How savings providers make money.
What is the top account for joint savings?
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 and top fixed-rate accounts.
My building society has a better rate than accounts here. Why isn't it featured?
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, in-app, 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, someone in Carlisle couldn't access branch-based accounts offered by Ipswich Building Society as there isn't one close by.
It's 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.
Are there savings accounts designed for my business?
If you have a business current account, the chances are it pays no (or very little) interest. So any businesses with cash stored, even just to pay the tax bill, are missing out on interest.
If you're a sole trader, you'll 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.
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