The savings market has been booming of late, with interest rates of up to 9% available depending on the type of savings account you go for.
It’s the best savers have had it in years. In fact, with the consumer prices index (CPI) measurement of inflation currently at 8.7%, it means that savers can actually beat inflation for the first time in years, albeit with just one specific savings deal.
If you want to take advantage of this relative gold rush then you'll need to get your money moving.
Old savings account = rubbish rate
Savings rates have continued climbing in recent months, thanks largely tohikes to the Base Rate of interest, which has jumped from 1.25% last July to its current level of 4.5%.
However, not all savers will benefit. Aswe highlighted here, banks will often respond to Base Rate hikes by introducing shiny new savings accounts.
Those with existing products will often see their rate rise only slightly–if at all.
That's why it's important you look to regularly shift your funds to a best buy account in order to really benefit.
So, let's look at the best rates currently available.
We'll start with current accounts and regular savers, which tend to offer by far the best rate.
The catch is they're only available on small sums of money (usually under £2,500), so if you're looking for a home for a larger pot then scroll straight to the section on 'best fixed-rate savings'.
Manage all your savings accounts in one place with Raisin, the simple savings service
Regular savers: up to 9% (if you’re a member)
Regular savings accounts are generally best for new savers as they don't allow you to deposit a lump sum upfront: instead, you make regular monthly contributions, and the money is returned to you with interest after one year.
However, if the rates are generous enough, and you are eligible, then they can also work for savers with a pot already built up.
All you do is put your funds in the best-paying easy access account and filter some money into a regular saver (or savers) each month.
So, what rates can you get?
Right now, the top rate on offer is a whopping 9% from Saffron Building Society. Savers can stash away between £1 and £50 each month, though the downside is that you will need to be an existing customer in order to qualify.
That means you will need to have been with the mutual for at least a year.
An easier regular saver to obtain comes from first direct, paying a rate of 7%.
You’ll be able to pay between £25 and £300 a month into the account, though the downside is that you will need to be an existing first direct customer to qualify (apply for a first direct current account here - this is an affiliate link).
If you do switch to first direct, you may be eligible for a £175 cash gift – find out more in this roundup of the best bank switching bonuses.
The best regular savings account we could find that truly is open to everyone comes from Halifax, which offers 5.50% interest for a year and the monthly contribution is capped at £250.
Best fixed-rate savings - up to 5.35%
The best rate from a fixed-rate bond at the moment is 5.35%, paid over a five-year term by Tandem Bank (available through Raisin). You can open it with just £1, too.
Of course, five years is a long time to not have access to your funds, so you might want to a shorter fixed-rate deal.
If you want to lock your cash up for a year then you can get 5.25% from the National Bank of Egypt via Raisin, though you’ll need to save a minimum of £10,000.
Over two years you can get 5.25%, again from Tandem Bank, while it is also the best option for three-year bonds, paying 5.30%.
Current accounts: earn up to 5.12%
If you have a Barclays current account and sign up for the Blue Rewards scheme, you can get access to the Rainy Day Saver account, which offers 5.12% AER on balances of up to £5,000 (0.65% on balances over this amount).
Unfortunately, the Barclays Blue Rewards scheme costs £5 a month,but you can get £5 back when you pay out at least two Direct Debits every month – find out more here, including how to qualify for the scheme.
Alternatively, you can get 5% for a year on up to £1,500 with Nationwide’s FlexDirect account., but the interest rate falls to 0.25% after 12 months.
To qualify for the 5% rate, you'll also need to pay in at least £1,000 a month.
Read ourroundup of the best bank accounts for switching bonuses
Notice accounts: get up to 4.4%
Notice accounts are effectively a halfway house between fixed-rate and access accounts.
You'll need to wait a few months before accessing your funds, but the rates are slightly more generous than those offering instant withdrawals.
The top option here comes from Hampshire Trust Bank, with its 120-day notice account.
You can bag a rate of 4.40%, and open the account with just £1.
Best easy/instant access savings: up to 3.85%
The best rates on easy access savings have improved recently.
In February, the best rate was 2.86%, but today you can get 3.85% from West Brom Building Society on balances from £1.
There is a downside though, with two withdrawals allowed per year.
If you want an account paying true easy access, whenever you need it, then the top account comes from Chip, which pays 3.82% on balances above £1.
Given there is no penalty for accessing your funds in such accounts, it may well be worth looking to move your money again even if you switched not that long ago.
Cash ISAs: earn up to 4.40%
The Personal Savings Allowance (PSA) has meant that it’s easy to get a tax-free return from your savings even if you don’t use an ISA, though it’s still important to use your tax-free ISA allowance (which is £20,000 for 2023/24).
That’s because any money you put into an ISA will stay tax-free long-term, even if the interest you earn grows beyond the PSA limits.
With the PSA, any interest you earn beyond the £1,000/£500 limit is taxed at your marginal rate.
The best rate on an easy-access Cash ISA is 3.65% paid by Charter Savings Bank on balances above £5,000.
Savers are normally only allowed to open one Cash ISA account per tax year, which usually means having to choose between the flexibility of an easy access deal and a better rate by locking into a fixed-rate deal.
Both Charter Savings Bank and UBL pay a rate of 4.45% on one-year fixed rate ISAs, though they have different minimum balances of £5,000 and £2,000 respectively. Those two banks are also the top options on two-year terms too, paying a rate of 4.55% with those same minimum balances.
Where to earn the most interest on your cash
Here's a table with all the top deals for you to compare at a glance.
The account you go for will probably be determined by the amount you have to save and whether you want instant access to your money.
Please note that we've only included the highest-paying account from each category (i.e.five-year bond, instant access ISA).
Provider | Type | Interest rate | Minimum/maximum deposit |
|---|---|---|---|
| Saffron BS | Regular Save* | 9% | £1 per month |
| Tandem Bank | Five-year fixed-rate bond | 5.35% | £1 |
Tandem Bank | Three-year fixed-rate bond | 5.30% | £1 |
Tandem Bank | Two-year fixed-rate bond | 5.25% | £1 |
National Bank of Egypt via Raisin | One-year fixed-rate bond | 5.25% | £10,000 |
Barclays | Saver account** | 5.12% for balances up to £5,000 (0.65% over this amount) | £800 into the linked account |
Nationwide | Current account | 5% | £1,500 |
UBL | One-year fixed rate ISA | 4.45% | £2,000 |
Hampshire Trust Bank | 120-day notice account | 4.40% | £500 |
West Brom BS | Easy access account | 3.85% | £1 |
Charter Savings Bank | Easy access ISA | 3.65% | £5,000 |
*You need to be a Saffron BS member.
**You need a Barclays current account and to sign up to Blue Rewards to access the Rainy Day Saver account.
Time to consider investing?
While it's good news that rates have been improving,the reality is you're likely to achieve a better return over the long term by investing (five years or more).
If you are comfortable taking on some risk for potentially better returns, you could consider investing in the stock market (capital at risk).
*This article contains affiliate links, which means we may receive a commission on any sales of products or services we write about. This article was written completely independently.
