Best places to save money in the UK 2022

Learn about the best types of account for saving money in the UK. We look at what each type of savings account entails and how to get the best interest rate.

Looking for the best places to save money? The reality is that “best” will depend on your saving habits, how frequently you want to access the account and other factors. In this guide we’ve listed the main types of savings accounts and their pros and cons.

Before you start saving

Consider any debts you have. While it’s a prudent idea to start putting money aside if you can afford to, before you delve into choosing a savings account you should consider any debts you have. This is because the interest you pay on debts usually outweighs any interest you would be able to gain on savings, so it may make better financial sense to pay off your debts first, before you think about using that money to start a savings account.

Assess whether you’re looking to invest rather than save. With a savings account you can deposit your money, earn some interest, and be sure you’ll get the total amount back at the end. But as it’s currently a low interest rate environment, the return on investing your money could be higher than what you’d earn with a savings account over the longer term. But your capital is at risk with investing – you may get back less money that you put in, depending on the performance of your investment. There are many different ways to invest, from buying company shares to setting up a stocks and shares ISA, so if you are interested in researching how to invest, check out our beginner’s guide to investing.

If you’d still like to start saving, we round up the different types of savings account below.

Lifetime ISAs

A Lifetime ISA can be used to help buy your first home or save for later life. You must be aged between 18 and 39 to open a Lifetime ISA, and make your first payment into it before you turn 40. You can put in up to £4,000 each year, until you’re 50. The government will then add a 25% bonus to your savings, up to a maximum of £1,000 per year. You can withdraw all the funds in the ISA (your savings plus the bonus) only when you buy your first home (worth up to £450,000) or, if you’re saving for later life, when you reach 60. Any withdrawals outside of these circumstances would see you lose 25% of the ISA funds as a penalty (so the government bonus, plus some of your actual savings, as the 25% is applied to the whole pot). Learn more about and compare Lifetime ISAs.


  • Earn a 25% bonus on your annual savings
  • A good way of ring-fencing your savings for either your first home purchase or retirement


  • Can’t access the funds under other circumstances
  • If you do withdraw the money you face a 25% penalty

Current accounts paying interest

So these aren’t savings accounts as such, but some current accounts (where you do your everyday banking) pay interest on in-credit balances. Strangely, these interest rates could be better than those that come with a specific savings account from the same banking provider. That’s great if you already have one of these current accounts, but if you don’t you would have to switch or open a new current account to find one that pays interest. And if you’re happy with your existing current account, it may not be worth switching provider just to get some interest on your balance plus banks often run switching incentives from time to time. Also, you’re usually limited to a certain portion of your balance that earns interest, plus the interest rate could be withdrawn or reduced ay any time.


  • Some current accounts pay better interest on their in-credit balances than you would get with a savings account from the same banking provider


  • If your current account doesn’t offer any interest you’d have to switch to or open one that does, which would mean moving from your existing banking provider
  • There’s often a limit on how much of your balance will earn interest

Regular savings account

With these savings accounts, you pay in a regular amount every month for a set period of time. Both the amount and time period will vary depending on which provider you go with, but there are options out there where you can choose to save relatively small amounts. The downside is you can’t withdraw the funds during this set period, and if you miss a payment or take the money out, there will be penalties. The upside is that this type of account attracts higher interest rates than both easy-access and notice savings account. Learn more about and compare regular savings accounts.


  • Interest rates are usually better than easy-access and notice savings accounts
  • The obligation to pay in every month will help build up savings


  • Can’t skip a month’s payments without penalties
  • Commitment to keep money tied in for a set period

Fixed-rate cash ISAs

Individual savings accounts, or ISAs as they are more commonly known, come with a tax-free wrapper. So you can save money in them and not pay any tax on the interest. You can only open one new cash ISA per tax year and there is a yearly limit to the amount you can save in them (currently £20,000 for the 2022/23 tax year). If you opt for a fixed-rate cash ISA, you should get a better interest rate than with an easy-access cash ISA. But you will be tying your money in for a fixed term (typically between one and five years). You won’t be allowed to make withdrawals during this term, although if you really need to pull your money out of a fixed-rate ISA, then the penalty would usually be to forfeit the interest. Find out more and compare cash ISAs.


  • Form of tax-free savings
  • Higher interest rates the longer you lock the money in


  • Limited to yearly ISA allowance (currently £20,000)
  • No withdrawals allowed during the fixed term

Easy-access cash ISAs

Easy-access cash ISAs have mostly the same elements as a fixed-term cash ISA: they come with a tax-free wrapper, you can only open one new cash ISA per tax year, and there is a yearly saving limit is 20,000. The main difference is you can access your money at any time and withdraw it if you need to. For this reason, interest rates on easy-access cash ISAs tend to be lower than those offered for fixed-term ones. Plus if you withdraw your funds, you’ll lose that portion of your £20,000 ISA allowance. (You can withdraw and top up some funds again, but your allowance doesn’t extend past the initial £20,000 you deposit; so you couldn’t take out your whole £20,000 and simply deposit it again later that tax year). Read more and compare easy-access cash ISAs.


  • Form of tax-free savings
  • Can access and withdraw the funds if you need to


  • Limited to yearly ISA allowance (currently £20,000)
  • Interest rates tend to be the lowest in the ISA product range

Fixed-rate bonds

Fixed-rate bonds involve depositing a single amount of money for an agreed period of time, at a set interest rate. So the money is tied in for a fixed term, which can range for one to five years. You won’t be able to add money to the savings pot during this time or withdraw it. The interest rate you get is fixed, which provides certainty on your level of return (although it’s not so great if interest rates go up elsewhere in the meantime). The longer you lock your money in, the higher the interest rate tends to be. There is usually a high minimum deposit required, so it could be a good option if you have a lump sum available, that you know you won’t need to get your hands on again in the immediate future. Learn more about and compare fixed-rate bonds.


  • Good option for investing a lump sum in the long term
  • Certainty on interest rate over the fixed term


  • Not suitable if you think you may need to access your savings before the fixed term ends
  • Risk that interest rates in the wider market go up after your savings are locked in

Notice savings accounts

With this option, you can usually still make deposits when you like, but you will have to give notice if you want to take money out of the account. This notice period could range anywhere from one month up to four months or more, depending on which provider you sign up with. If you don’t give the required notice, there are penalties – often in the form of reduced interest payments. The interest rates on notice savings accounts tend to be better than easy-access savings accounts, with longer notice periods attracting higher rates. You usually need to have a higher minimum deposit to open a notice savings account, and you’ll also need to maintain a certain balance in the account. Learn more about and compare notice savings accounts.


  • Interest rates more competitive than easy-access savings accounts
  • Good option if you know you don’t need immediate access to your money


  • Less flexibility – you have to give notice of withdrawals
  • If you don’t give enough notice, there are penalties attached
  • Often require a higher starting deposit and need to maintain a certain balance

Easy-access savings accounts

As the name implies, these are savings accounts where you can still easily access your money. So you have the freedom to make numerous deposits, but also the ability to withdraw funds instantly without giving any notice. The flip-side is that in exchange for that flexibility, the interest rates are among the least competitive for savings accounts. This type of account can usually be opened quickly online, with a small initial deposit (sometimes as low as £1). You can then save as little or as much as you want in the account (although if your interest income on large deposits goes over your personal savings allowance, there could be tax to pay). Discover more and compare easy access savings accounts.


  • Usually able to open these accounts quickly online
  • Ability to save small or large amounts
  • Instantly withdraw funds if you need to


  • Interest rates are on the lower side
  • Interest income is not tax-free (if you go over the personal savings allowance)

How to choose the best savings account

What turns out to be the “best” savings account for you will depend on your individual needs, so here are some pointers to consider before you choose one:

  • Access. Do you need to have instant access to your savings or are you happy to leave them untouched in an account for a long period of time? This will influence whether you go for an easy-access, notice or fixed-term account.
  • Interest rate. Obviously an important factor if you’re looking for a return on your savings. Check out which provider is offering the best rates – but remember the type of account you choose (e.g. easy-access vs fixed-term) will also have a bearing on how competitive the rate is.
  • Bonuses. Some accounts will have introductory offers when opening a new account, or bonuses for leaving your money in the account for an extended period of time. You might want to keep an eye on when the bonus offer ends so you can switch to a better account.
  • Deposits. Do you want to save small amounts regularly or deposit just a single lump sum? This will influence the type of account that is most suited to you.
  • Minimum balance. There could be a minimum balance required to open and then maintain an account, which you are not allowed to fall below. Make sure you’re confident you can meet this savings threshold.
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