How much interest you will earn on £20,000 is likely to be determined by the type of savings account you have, the rate it pays and the level of access that you need. You can usually get a better rate if you're willing to give a certain amount of notice before making withdrawals or to commit to not making withdrawals at all for an agreed period. Plus, since you can invest £20,000 each year into an ISA, your savings can earn you tax-free interest. We scour savings rates daily to help you find a good home for your hard-earned £20,000.
We scan the savings market daily and automatically update the best offers highlighted throughout this guide.
With £20,000 in Tandem Bank's easy access cash ISA paying 4.71% you'd earn £942.00 over a year, or £78.50 per month. Dudley Building Society's 3.95% 30-day notice account would pay £790.00 over a year (£65.83 monthly), while Tandem Bank's 4.71% 2-year fixed-rate ISA would pay £942.00 over a year (£78.50 monthly).
For those who have already used their 2026/2027 ISA allowance, or who are willing to consider forfeiting access to their savings altogether for the duration of a fixed-rate bond, Stafford Railway Building Society's 4.26% 180-day notice account would pay £852.00 over a year (£71.00 monthly) on £20,000, while Close Brothers Savings's 60-month fixed rate bond would pay £960.00 over a year (£80.00 monthly) – £5,283.45 at maturity.
Use the fields above to estimate your return.
In terms of tax-free savings, Tandem Bank is currently offering 4.71% on an easy access ISA. If you're happy to give 30 days' notice before making any withdrawals, then Hinckley & Rugby Building Society is currently offering 4%. If you're happy to consider a fixed-rate ISA (where you won't be able to access your savings during the fixed term), you could earn 4.71% over 24 months with Tandem Bank.
Outside of ISAs, you could earn 5% with easy access at LemFi, 4.26% on Stafford Railway Building Society's 180-day notice account or 4.8% on Close Brothers Savings's 60-month fixed-rate bond (note that you typically can't access your money at all with a fixed-rate bond).
If you're wondering why locking into a fixed-rate bond might get you a lower rate than opting for easy access, this can happen when banks are expecting rates to fall in the coming months or years.
| Best easy access | LemFi Clearbank - Instant Access Savings Account (5%) |
|---|---|
| Best cash ISA | Tandem 2 Year Fixed Rate Cash ISA (4.71%) |
| Best fixed-rate bond | Close Brothers Ltd Close Savings 5 Year Fixed Rate Bond (4.8%) |
| Best notice account | The Stafford Building Society Notice 180 Account (4.26%) |
| Best current account | iFAST Global Bank (2.65%) |
Even greater returns may be possible with investment products such as a stocks and shares ISA, if you're willing to risk getting back less than you originally invested. Only consider stocks if you won't need to spend the money for several years (5 years is a widely-used rule of thumb).
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£20,000 is well below the £120,000 limit that the FSCS (Financial Services Compensation Scheme) pledges to compensate in the event that a UK bank or building society (authorised by the Prudential Regulation Authority, which you can check on the Financial Services Register) goes bust.
This limit is per person, per bank (or building society). So bear in mind that if you already have £75,000 invested with say, Virgin Money, and then you open a new Virgin Money savings account with a further £20,000, then £10,000 of your overall holdings with Virgin Money would not be covered in the event that the bank collapsed.
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Traditionally, current accounts haven't paid great interest, and many people prefer to hold their savings in a completely separate account. However, some current accounts are now offering interest rates capable of rivalling savings products. Bear in mind that if you've used your personal savings allowance for the 2026/2027 tax year (£1,000 of interest for basic rate taxpayers, £500 for higher rate and £0 for additional rate), then the interest you earn in a current account will be taxable.
iFAST Global Bank is currently paying 2.65% on balances in its current account.
You can also check out today's bank switching offers, which pay out a one-off sum. You won't even need to transfer your £20,000 for this, but other "strings", like minimum monthly contributions, do usually apply.
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