Compare savings accounts

There are a lot of savings accounts available out there, so you want to decide which type is best for you first, in order to make the comparison a bit easier. If you have never opened a savings account before and would like to know how, then we have a guide on opening a new savings account.

Why should I compare savings accounts?

Chances are that if you’re on this page you know this already, but choosing the right savings account can make a significant difference for your finances. Interest rates aren’t stellar these days, but there are still gains to be made.

1-2% more or less may not seem like much, but the more you build up your savings, the more difference it’ll make. Say you have £2,500 set aside. With 1.5% annual interest, it’ll earn you £37.50 after a year. With 4% interest though, you’ll get £100. The difference between a pub lunch for two at the local Spoons and a nice dinner in a fancy restaurant. Just saying.

The other important thing to keep in mind is that there are different types of savings accounts with different features that fit different saving profiles. A 50-year-old that has been saving all their life will not need the same savings account of a young graduate at their first job. So you should compare accounts, rates and features to find the best savings account for you. Learn more about the best places and type of accounts to save money.

How do I compare savings accounts?

Savings accounts aren’t the most complicated products in the personal finance world, so the list of their most relevant features is fairly short:

• Access. This is probably the first decision you need to make. Are you okay with your savings being locked away for a certain period of time? What if there’s an emergency? There are instant access savings accounts where you can withdraw the money with no notice needed to be made to your bank or building society. In contrast there are fixed-rate savings accounts where you can earn a higher interest rate but need to keep the money in the account for a fixed period of time.
• Interest rate. Interest rate is obviously one of the most important factors to consider. Just be aware that, depending on how much you can deposit into the account and when, higher interest rates don’t always come with higher overall returns. You can browse savings accounts sorted by interest rate here.
• Minimum and maximum deposit. Some top-paying savings accounts either have a high minimum deposit (so most small savers can’t get them) or a fairly low maximum deposit (great for small savers but you’ll still need a different solution for the rest of your savings if you have more).
• Time limit/introductory rate. Many savings accounts (particularly fixed rate bonds and regular savings accounts) expire after a certain period of time. Make sure you’re aware of what happens to your savings next. Also, if you find a really great rate somewhere, chances are it will only last for one year or so. More on this below.
• Overall earnings. Okay, this isn’t exactly a feature, but it’s an easy way to compare deals when things get complicated. Think of how much money you want to put into your new account, figure out how much it’ll earn you and compare different deals to find out which the most lucrative is.

Expert explainer: How to safely switch your savings

Kate Steere

Editor

It may seem a daunting task to switch savings accounts. But by not doing so, you could be losing out on hundreds - maybe even thousands - of pounds in interest each year.

When inflation is high, the value of your savings becomes less in real terms. Essentially, what you can buy with the money sitting in your savings account now, is less than what you could buy a year ago. That’s why it’s important to earn as much interest as you can to minimise the effect of inflation on your savings.

While there may not be a switching service like there is for current accounts, it’s still easy to switch savings accounts. The first step is to compare the best rates available for your chosen type of savings account.

The next step is to check if the provider is protected by the Financial Services Compensation Scheme (FSCS). This means that your deposits are protected up to £85,000 (£170,000 for joint accounts). So if the provider were to go bust, you could get your savings back. One thing to be aware of though, if you have multiple accounts with one banking group, these all contribute towards the £85,000 limit. You can check whether a provider has FSCS protection by looking for the logo in our comparison tables.

If you’re worried about sending a large amount of money at once, you can start by sending a small amount - say £1 - to check it arrives safely. Then you can transfer across your remaining savings balance. However, make sure to check your new savings account allows multiple deposits - some fixed-rate accounts won’t allow you to make further additions.

Finally, if you’re worried about not being able to access your savings, then it’s probably best to go for an instant access or easy access account. You may get higher rates with a fixed-rate bond, but your money will be locked away for the duration of the term and you won’t be able to access it.

An overview of our savings comparison

Savings accounts vs inflation

If you read personal finance news, you may have previously heard about savings accounts that “beat” inflation.

That’s because if you keep your savings in an account that pays less than the inflation rate, your money will be worth less and less every year. Inflation causes goods to become increasingly more expensive, which means that, with the same amount of money, you can buy less.

If you stash your savings under the mattress long enough, they’ll lose most of their value – just ask your grandmother how much it was for a loaf of bread fifty years ago.

An interest-paying savings account can partially prevent that, but unless the rate beats the inflation, you’re still losing purchasing power and, by extension, money, even if it may not look like it.

Just to give you an idea, in October 2019 the 12-month inflation rate was 1.5%. While a decent number of fixed term and regular savings accounts will pay more than that, your average high-street easy access account probably won’t. Sadly, a combination of global factors have driven inflation up to some historic highs. As of November 2022, the Consumer Prices Index (CPIH), which includes homeowners’ costs and is the main measure of rising prices in the UK, was at whopping 9.3%. This isn’t set to go down any time soon, sadly. This means that even the most market-beating interest rates will struggle to keep up with inflation today.

Setting up a savings strategy

Avoiding spending is certainly the hardest part of saving, but deciding where to keep the money you’ve industriously put aside isn’t all fun and games either. Here’s some advice on how to approach the problem:

• Pick your current account first. High-interest current accounts aren’t common, good rates are only available for short periods of time and are often offered by high-street banks whose mobile apps and online banking facilities were only good in the 1990s. Still, if you can bag a decent one, you should. Introductory rates are sometimes really great and you’ll always get access to your money.
• Emergency-proof your strategy. Whether you keep it in a current account or in an easy access savings account, make sure that if something happens, you’ve got a decent sum immediately available to take care of emergencies. Learn more about budgeting and saving in an emergency.
• Set up a regular saver for your monthly savings. Regular savings accounts tend to offer great rates, so if you save part of your income every month, you should open one. You can set up a standing order and forget about it, which will also eliminate the temptation of spending the money. However, be careful, because many regular savings accounts don’t allow you to withdraw your money once you’ve deposited it.
• Plan for the long term too. After the first year or two of saving regularly, you’ll have enough to start thinking about your medium to long term strategy. You have many different options that mostly depend on what you’re planning to do with the money. For example, if you know for sure you either want to buy a house or save for retirement, a lifetime ISA offers good returns thanks to government contributions. Alternatively, if you’d like to keep your options more open, you may want to consider a fixed rate bond.
• Investing is an option. Investing your savings is way riskier than depositing them in a savings account and it isn’t for everyone. However, it’s also become much easier than it used to be, even for complete beginners. If it’s something you may want to consider at some point, you can read our guides on share trading and on stocks and shares ISAs.

What are introductory bonus rates?

Something to look out for when browsing savings accounts is high interest rates for new customers, often referred to as “introductory bonus rates”. While this is definitely an alluring feature, remember that when the introductory period is up you’re likely to be left with a significantly lower interest rate. Because of this, it may be a good idea to keep your account open while you qualify for the introductory rate, before switching to an account with a better rate once the introductory period is finished.

If you decide to go with an account offering an introductory bonus rate, make sure you’re clear on the terms so you don’t end up losing the rate. For example, if you withdraw money before the end of the introductory period the introductory rate may be withdrawn.

Are savings taxed?

A taxpayer who pays the basic rate of income tax can earn up to a maximum of £1,000 from interest payments on a savings account without paying tax, while a higher rate taxpayer can earn up to £500 before paying tax. This is what’s known as the Personal Savings Allowance.

The Personal Savings Allowance is in addition to money earned from an ISA account, which is all tax-free.

What is the FSCS?

Short for Financial Services Compensation Scheme, the FSCS protects customers when financial services fail. Look out for its logo on the financial products you’re comparing. If your money is in a bank – an institution that holds a banking licence – then up to £85,000 is protected by the scheme if the bank goes bust. However, if you had more than £85,000 across two banks in the same group – such as HSBC and First Direct – then only £85,000 is protected. Find out more about banking brands that share the same FSCS protection.

Since 2001, the FSCS has helped millions of UK customers, paying out billions of pounds. If a firm has stopped trading or does not have enough assets to pay up, the FSCS will step in.

Best banks for savings customer satisfaction in 2024

In 2024, we published our customer satisfaction survey on savings accounts in England, Scotland, Wales and Northern Ireland. Here’s the full list of providers we considered and how many of their customers said they would recommend them to a friend. Learn more about the results and the winners.

Brand	Logo	Overall satisfaction	Customers who’d recommend	Review
Marcus		★★★★★	100%	Marcus by Goldman Sachs’ customers were impressed with its “ease of use” and competitive rates, the combination of which saw it score 4.9 out of 5 and an impressive would recommend score of 100%.	Read our review
AA Savings		★★★★★	97%	Better known for its breakdown and insurance services, AA Savings offers a good range of savings accounts. Customers praised its “straightforward” application process and “friendly customer service”, all of which contributed to its score of 4.9 out of 5.	Read our review
Virgin Money		★★★★★	95%	Virgin Money’s has a good variety of savings accounts available to new customers, as well as exclusive accounts linked to its current account. It scored 4.6 out of 5 and 95% of its customers would recommend it to a friend.	Read our review
Nationwide		★★★★★	94%	Not far behind Virgin Money, Nationwide also scored 4.6 out of 5. It offers its members exclusive savings accounts. Our survey found that customer’s recommended Nationwide for its “friendly” customer service and competitive interest rates.	Read our review
Yorkshire Building Society		★★★★★	93%	With Yorkshire Building Society, you can choose from a range of savings accounts including regular savers. The building society also has a series of savings pledges that look to support members by letting them know of new deals first. It also scored 4.6 out of 5.	Read our review
Santander		★★★★★	90%	High-street bank Santander comes with all the advantages of a big bank and offers a wide range of savings accounts. Customers particularly liked how easy it was to use and its decent rates of interest, scoring it 4.6 out of 5.	Visit Santander
Halifax		★★★★★	93%	Part of the wider Lloyds Banking Group, Halifax has several savings options, ranging from easy access accounts to fixed term savings. Customers in our survey higlighted its quick set up and ease of use, leading to a score of 4.3 out of 5.	Read our review
NatWest		★★★★★	88%	NatWest has savings accounts for every financial need. Its products range from regular savers, fixed rate ISAs to children’s savings accounts. It clear the bank promotes long-term loyalty, with some customers having held an account with the bank for multiple years. It scored 4.3 out of 5.	Read our review
Barclays		★★★★★	85%	Savings accounts by Barclays come recommended by 85% of its customers in our survey and scored 4.3 out of 5. Respondents highlighted its good customer service and decent interest rates.	Read our review
HSBC		★★★★★	93%	HSBC has lots of different savings accounts on its roster. Like other banks, there are accounts that have exclusive rates for its current account customers. It scored 4.1 out of 5, but achieved a would recommend score of 93%.	Read our review
Post Office		★★★★★	89%	Post Office offers both online and brand-based savings products, which makes it popular with customers who like it for its good customer service and “trustworthiness”. It posted a “would recommend” score of 89% and a final score of 4 out of 5.	Read our review
Tesco Money		★★★★★	80%	The financial arm of the supermarket, Tesco Bank has a range of different savings accounts including a good variety of fixed term savers. Respondents liked its “good” customer service and ease of use, resulting in its score of 3.8 out of 5.	Read our review

Customer satisfaction scores methodology

In December 2023, we ran a customer satisfaction survey on savings accounts. 750 people answered and told us how happy (or not) they were with their savings provider.

The survey asked respondents how satisfied they were with their savings account on a scale from 1 to 5, and also whether they would recommend their savings providers to a friend or not. We turned the results into star ratings and shortlisted the top-performing brands for our awards. Where there was a draw in terms of star ratings, we used the recommendation score (the percentage of customers who said they would recommend the brand to a friend) as a tie-breaker.

Frequently asked questions

• What is a savings account?

  As the name suggests, a savings account is a bank account that’s designed to hold your savings. Unlike with a current account, you don’t get a debit card and you won’t be able to receive your salary in it or set up direct debits or standing orders. Instead, you can only withdraw or deposit money in it. In exchange for keeping your savings there, you’ll earn an interest rate.

• Who can open a savings account?

  Usually, anyone who is 18 or older, lives in the UK and can meet the required minimum deposit (which can be as low as £1). Children’s savings accounts are also available, but a legal guardian will usually have to be the person opening it.

• How do I open a savings account?

  You can normally do it online, through your mobile app or in person at your bank’s branch. It’s usually a very quick process, but depending on whether you already have an account with the same bank, you may need an ID and a proof of address.

• How do I close a savings account?

  It depends. Some savings accounts can be closed online – this is more likely if the interest is paid monthly and the account is easy access. If you’re trying to close a regular saver or a fixed term account early instead, you may have to go to a branch or contact the bank’s customer service.

• Can I switch savings accounts? What happens if I do?

  You most certainly can, but if you’re thinking about an automatic service like the one you get for current accounts (the so-called Current Account Switch Service, CASS), you’re out of luck. You’ll need to do it manually: open your new account, move your savings, close your old account.

• Should I switch savings accounts?

  If you find a better deal, go for it! That’s what the cool comparison table at the top of the page is for. However, you want to be very aware of your current savings account’s terms and conditions. With many savings accounts (particularly fixed rate bonds and regular savers), you won’t be able to get out of your current deal until it expires without paying a fee. Easy access accounts tend to have less strings attached.

• Can I add someone to my savings accounts?

  Yes, you can usually turn your personal savings account into a joint savings account. You may have to pop into a branch or give your bank a call though.

• What is AER?

  It stands for annual equivalent rate. It tells you how much a particular savings account will pay you in interest if you deposit your money in it and leave it there for one year. The long version of the story is in this guide.

• What is simple and compound interest?

  Compound interest is when you earn interest on your interest. For example, say you have £1,000 in a savings account that pays a 5% interest rate. If the interest is paid yearly, at the end of the year you’ll have £1,050. However, if the interest is paid monthly, at the end of the year you’ll have £1,051.16 because your balance would have grown a bit every month. The AER of the first account (paying annual interest) will be slightly lower than the AER of the second account (paying monthly interest), because the AER takes compound interest into account. Visit our guide on savings accounts and compound interest for more information.