August 2023’s savings round-up & news

The latest news to help you get the most from your savings account.

Here’s my monthly update sharing changes at leading UK savings accounts, as well as some of the articles you might have missed on the blog.

August’s savings update video

August’s savings news

Inflation falls & base rate up to 5.25%

Inflation still remains high – much higher than almost all savings accounts out there. It was expected to fall, but it has stayed at 8.7%. And the “core inflation” figure (when you remove food and energy prices) actually went up.

As a result the base rate increased from 4.5% to 5% (a larger jump than predicted), and the markets are now expecting rates to increase to around 6% by the end of this year. A lot of the increase below are pricing in this change.

Best rates improve across most account types

This table shows the increases on the best paying accounts at the time of writing, compared to my update last month.

Account type	Best rate 8 August 2023	Best rate 4 July 2023	Change in percentage points
Easy/Notice
Easy access	5%	4.35%	+0.65%
Limited access	4.6%	4.35%	+0.25%
90-day notice	5.35%	5.09%	+0.26%
120-day notice	5.45	4.85%	+0.6%
Regular
Loyalty	7.5%	9.5%	-2%
Linked	7%	7%	0%
Open to all	6%	6%	+0.5%
Fixes
6 month fix	5.55%	5.34%	+0.21%
9 month fix	5.64	5.29%	+0.45%
12 month fix	6.06%	6.05%	+0.01%
18 month fix	6.07%	6%	+0.07%
2 year fix	6.1%	6.05%	+0.05%
3 year fix	6.09%	5.98%	+0.11%
4 year fix	5.85%	5.75%	+0.1%
5 year fix	5.81%	5.7%	+0.11%
ISAs
Easy access ISA	4.4%	4%	+0.4%
1 year fix ISA	5.75%	5.21%	+0.54%
2 year fix ISA	5.9%	5.25%	+0.65%
Lifetime ISA	4%	4%	+0%

Easy Access rates up to a huge 5% – though watch out for the bonus

This week Tandem increased the easy access rate to 5% – up by a huge 0.65% on their previous rate, and towering (for now at least), 0.35% above the next best rate.

The app only savings account is pretty easy to set up and use – I’ve certainly no complaints. However there’s one catch with this eye catching rate.

The full 5% includes a 0.35% bonus. Now, it’s easy to add this within the app, and it’ll last for 12 months. So it’s only those with older smartphones (or aren’t keen on digital banking) who will miss out.

But if you’re an existing customer you’ve probably already activated that bonus. I added it to mine in February and you may have triggered your’s earlier. If that is the case you won’t actually get the full 5% as at some point it’ll drop down to the udnerlying rate (currently 4.65%).

That’s not really anything to worry about – just make a note in your diary when this ends so you can move your cash elsewhere if there are better options out there. Of course that could even happen before your bonus finishes.

I wouldn’t be surprised if others react to this, especially the likes of Chip and Kroo who have made a big show of being near the top of the table. However this is a big move from Tandem, far more than the 0.25% base rate increase – and that might be too much for some of the challenger banks to follow.

These rates can all still be beaten by the slightly complicated Barclays Blue Rewards Rainy Day Saver which pays 5.12% on the first £5,000. Though with Tandem now just a fraction behind this it could soon be time to ditch Barclays.

Easy access picks as of 8/8/23

A longer list of accounts is available here. The leading options are below:

• Barclays Blue Rewards (5.12% AER variable): min £1 / max £5,000 (requires current account with Blue Rewards add-on)

• Tandem (5% AER variable, includes 0.35% bonus for 12 months): min £0 / max £250,000
• Monument Bank (4.65% AER variable): min £25,000 / max £400,000
• Secure Trust Bank (4.65% AER variable): min £1,000 / max £85,000
• Shawbrook Bank (4.63% AER variable): min £1,000 / max £85,000
• Beehive Money (4.6% AER variable, includes 2.1% bonus until 31/8/2024): min £1,000/ max £250,000
• Cahoot (4.6% Variable): min £1/ max £2m
• Saffron Building Society (4.6% AER variable): min £10 / max £500,000

As ever, these could well change again in the coming days, so check out my best buys guide for updates.

Limited access picks as of 8/8/23

You can now beat all the top limited access rates with easy access accounts, so I personally wouldn’t bother – unless you want to save with a particular bank.

And on that there’s been more movement from the big banks on their limited access rates. This is largely in response to the FCA cracking down on poor rates via the new Consumer Duty rules.

One to possibly check out are 4.2% from Halifax for Reward current account customers, though this drops to 1.05% if you make more than four withdrawals a year. Club Lloyds can get a similar account but with a lower rate. Both are available with the same rates as ISAs.

The top accounts this month include:

• Halifax Reward Bonus Saver (4.2% AER variable): min £1 / max £9m
  • rate reduces to 1.05% if you make four or more withdrawals
  • requires a Reward or Ultimate Reward current account – review here
• First Direct Bonus Saver(4% AER variable): min £1 / max £50,000
  • rate reduces to 1.75% in months you make a withdrawal
  • requires a current account with First Direct
• HSBC Online bonus (4% AER variable): min £1 / max £50,000
  • rate reduces to 1.75% in months you make a withdrawal
  • requires a current or other savings account with HSBC
• Lloyds Club Lloyds Advantage Saver (4.% AER variable): min £1 / max £9m
  • rate reduced to 1% if you make four or more withdrawals
  • requires a Club Lloyds current account – review here

Current account linked saver picks as of 8/8/23

On the same point, you might not want to bother with opening up new accounts, and rather keep your cash with your current bank instead. Though you’ll get a lower rate, there might be something said for keeping things simple. I’ve listed the ones here which don’t have restrictions on balances or withdrawals.

• Kroo: (4.35% AER variable): min £0 / max £85,000
  • Interest is earned in the main current account
• Chase Bank (4.1% AER variable from 14 August 2023, 3.8% until then): min £1 / max £500,000
  • Must set up a separate savings account to get the interest – review here
• Monzo (4% AER variable): min £0 / max £100,000
  • Must set up an Instant Access savings pot to get the interest

Notice accounts picks as of 8/8/23

There are improvements on three, four and six month notice accounts again this month, all of which beat the current top easy access rate.

There’s also a 6 month tracker from Secure Trust Bank that follows the base rate which is worth a look if you know you won’t need the cash for a while.

• 90 days notice BLME (5.35% expected profit rate variable): 90-day notice: min £20,000 / max £1m
• 120 days notice Dudley Building Society (5.45% AER variable) 120-day notice: min £1,000 / max £500,000
• 195 days notice Buckinghamshire Building Society (5.3% AER variable) 195-day notice: min £20,000 / max £500,000

9.5% loyalty regular savers goes

Last month I told you about a 9.5% loyalty regular saver from Saffron – and it didn’t last long. It’s now been removed, but that’s no huge thing as not many of you were eligible anyway.

Otherwise there’s no changes to regular saver since last time – except the gap between them and easy access is getting smaller.

I’ve got a dedicated Regular Saver best buy article, so you can see further details and more rates there.

Regular Saver accounts picks as of 8/8/23

• Skipton Building Society Member Regular Saver (7.5% AER fixed) – min £0 / max £250 a month (requires BS membership on or before 31 May 2023)
• First Direct (7% AER variable) – min £25 / max £300 (requires current account)
• Club Lloyds (6.25% AER fixed) – min £50 / max £400 (requires current account)
• Natwest or RBS (6.17% AER variable) – min £1 / max £150 (requires current account)
• Beehive Money Regular Saver (6% AER fixed) – min £10 / max £250 a month

Have fixed rates peaked around 6%

You can still get above 6% on one, two and three year fixes – but it’s looking like they won’t go up any more. In fact some providers have already reduced their rates a little here.

With the Bank of England and markets now expecting the base rate to peak around 5.75% rather than 6% or higher it’s likely any future base rate hikes are already priced in. So if you can fix, it might be wise to do it now in case they do fall further.

Remember, most fixed rate accounts will pay all the interest at the end of the term, so the longer fixes will very likely take you over your personal savings allowance, meaning you’ll be subject to tax on the excess.

Here are the leading options right now. Make sure you keep an eye on my best buy list for all the options.

Fixed savings accounts picks as of 8/8/23

• 6 months Secure Trust Bank (5.55% AER variable): min £1,000 / max £1m
• 9 months Hampshire Trust Bank (5.64% AER fixed): min £1 / max £250,000
• 12 months SmartSave (6.06% AER fixed): min £10,000 / max £85,000
• 15 months Oak North Bank (6% AER fixed): min £1 / max £500,000
• 18 months Castle Community Bank via My Community Finance (6.07% AER fixed): min £1,000 / max £85,000
• 2 years Recognise Bank (6.1% AER fixed): min £1,000 / max £85,000
• 3 years Castle Community Bank via My Community Finance (6.08% AER fixed) 3-year-fix: min £1,000 / max £85,000
• 4 years Hampshire Trust Bank (5.85% AER fixed): min £1 / max £250,000
• 5 years Cynergy Bank (5.81% AER fixed): min £1,000 / max £1m

Premium Bonds hike again to 4.65%

There’s been another Premium Bond increases since my last update. From September the prize rate will be 4.65%

The latest change improves the odds from 22,000:1 to 21,000:1, which means you’ve a better chance of winning, along with the likelihood you’ll win a bigger prize if you do get something. I’ve written in more detail about the change here.

ISAs rocket to 5.9%

For those of you who need the tax-free earnings offered by ISAs, there have once again been improvement on rates again this month.

Though they’re still well below the non-ISA accounts, rates are worth looking at. The top easy access ISA is now 4.4%.

The bigger movement has been in one and two year fixes, with the FCA pressure on the big banks pushing Natwest to offer a 5.9% two year fixed ISA – though this ends for new customers on 9 August and existing Natwest customers on 14 August. The best one year fix is a decent 5.75%.

ISA picks as of 8/8/23

• Easy access Cynergy Bank (4.4% AER variable): min £1 Transfers in
• 1 year Paragon Bank (5.75% AER variable): min £500 Transfers in
• 2 years Natwest (5.9% AER fixed): min £1,000 Transfers in
• 3 years Secure Trust Bank (5.6% AER fixed): min £1,000 Transfers in
• 4 years Zopa (5.26% AER fixed) min: £1
• 5 years Zopa (5.26% AER fixed) min: £1
• Lifetime Moneybox (4% AER, drops to 3.25% after one year): min £1

Where to put your savings in August 2023

Below are my “simple” tips – the accounts that’ll give you the highest rates, though make sure you check for updates in my regularly updated savings best buy article,

Of course you might be able to fix your money for better rates. The same goes if you’re happy to have your money in lots of different places. And you might have existing accounts closed to new customers with better rates. But if you just want one or two accounts, these are the ones I’d go for right now.

Best places to save

Going on the idea of keeping things simple, I’d look at using Tandem for your savings. Yes you can get a little more from Barclays, but it’s a faff (and unethical). If you can lock some away for a bit then you might consider a higher paying notice account.

Amount saved	Account	Rate	Notes
Up to £85,000	Tandem	5%

Best places to save extra each month

If you’re looking to save every month then it’s worth looking at a regular or monthly saver. The top paying ones all require a current account, but I’d go for the Club Lloyds Monthly Saver over the higher paying First Direct account one as you can pay in more each month, plus you get free cinema tickets or Disney+ on top.

Amount saved	Account	Rate	Notes
Up to £400 a month	Club Lloyds Monthly Saver	6.25%	Requires a current account, fixed for 12 months

Best places to avoid tax on interest

If you’re going above your Personal Savings Allowance (or don’t have one), then you can obviously save up to £20,000 in an ISA and £50,000 in Premium Bonds. I’m assuming you don’t need access to this money.

Amount saved	Account	Rate	Notes
Up to £20,000 (more if transferred)	Natwest 2 year ISA	5.9%

Best ethical savings option

The easy shorthand is to go for a building society account, though Tandem also claims to be building a green bank and has decent rates. Here are the best paying ISA and non-ISA.

Amount saved	Account	Rate	Notes
Up to £20,000	Principality Building Society easy access ISA	3.9%
Up to £1m	Family Building Society easy access	4.35%