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Compare savings accounts
Table: sorted by interest rate, promoted deals first
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.
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 aside. With a 0.5% annual interest, it’ll earn you £12.50. With a 2.5% interest, you’ll get £62.50. The difference between a pub lunch at the local Spoons and a great 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.
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?
- 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.
- 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.
Savings accounts vs inflation
If you read personal finance news, you’ll hear quite a lot about savings accounts that “beat” inflation.
That’s because if you keep your savings in an account that pays less than the inflation, 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.
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.
- 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.
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.
Frequently asked questions
Read more on this topic
- Emergency fund: What it is and how to build one
This type of savings account can save you from a lot of financial stress and anxiety.
- Millionaire calculator: How long would it take to save a million?
Use our calculator to find out how long it would take you to save up a million pounds based on the interest on your savings account.
- Paying tax on interest from a savings account
If you earn interest from a savings account, you need to pay tax on that interest at the same rate as the rest of your annual taxable income.
- Compare the best 3-year fixed-rate bonds UK 2021
Discover how to find the best fixed-rate bonds and how they compare to other savings accounts.
- Compare the best 5-year fixed-rate bonds UK 2021
Discover all you need to know about 5-year fixed-rate bonds, including how to find the best one for you.
- Compare the best fixed-rate cash ISAs UK 2021
Discover how fixed-rate cash ISAs work, how to find the best fixed-rate cash ISA and more.
- Compare the best lifetime ISAs UK 2021
Discover how a lifetime ISA works, how to find the best lifetime ISA and more.
- Compare the best ISA rates for over-50s UK 2021
If you’re over 50 looking for the best ISA rates, this guide will provide all the information you need
- Compare the best easy-access ISAs UK 2021
Discover what is an easy-access ISA, how to find one and more.
- The safest bank in the UK
While there is no such thing as absolute safety, there are a few things you can look at to try and figure out how likely your bank is to collapse.
Hi there!
Is it possible to track down a 45-year-old National Savings Bank Ordinary account? I’ve found the original deposit/ demand book!
I’m not sure if it still has a deposit within?
Hi Neil,
Thanks for getting in touch with Finder. I hope all is well with you. 😃
Yes, it is possible to track down your account. The first thing you need to do is to get in touch with your bank. Be sure to have your account details at hand so you can quickly present it to the bank.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
Hi I am looking for a trustworthy bank in UK or abroad to deposit £350,000 approximately – can you recommend any and what sort of interest I can expect for such a large amount? NB I am planning to retire in the Philppines so will need access to my money easily.
Hi Philip,
Thanks for getting in touch with finder. I hope all is well with you. :)
We currently don’t have a list of overseas bank accounts. What we have is a list of savings account that you will find on this page. Since we can’t make specific recommendations, you can use our comparison table to see which bank account is the right for you. In the fourth column, you would see the interest rate of each bank account. By using our table, you can get an idea of how much your money will grow according to the interest rate. Once you find the right account, you may then click on the “Go to site” or “More info” green button to be redirected to your chosen bank’s website.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
Hi I’ll like to open saving account. How do I apply please
Thanks
Reply
Hi Hana,
Thanks for your inquiry
You can compare saving account on the page above and once you have chosen one, you may click the ‘go to site’ button to proceed to the application process. You may also click the more info button for more details or you may contact them directly.
Hope this information helps
Cheers,
Arnold
I have £150000 to invest as a lump sum. What interest rate might I expect
And what might it earn and would it be compounded pa
Thank you
Hi Bobcharters,
Thank you for your inquiry.
The possible interest rate that may apply to your savings or investment of £150,000 would depend on the account you get and the term of your investment. This varies between banks. If you’ve already chosen a savings account from the list above, best to click on the ‘Go to site’ button so you’d be redirected to the bank’s main page and you will find out the interest rates they have for a certain amount of investment. You can also contact them directly to get more details on interest rates.
Cheers,
May