August 2024’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 site.

August’s savings update video

August’s savings news

Chip, Chase, Kroo and more cut rates for existing savers

Following the Bank of England cutting the base rate on Thursday 1 August from 5.25% to 5%, it was no surprise to immediate see emails from some leading providers that they too would be reducing interest rates for savers.

The fastest ones to change were tracker rates from Chip (both Instant Access and ISA), Chase and Kroo. Interestingly all three only changed their offering from variable to tracker this year.

Other existing accounts have fallen or are about to, with Tandem, Moneybox and Zopa just a handful. Check your emails or in-account messages to check if your savings have been or will be affected.

Don’t forget some providers dropped rates earlier in the year, most notable Santander’s eSaver account.

Santander Edge rate stays the same for existing customers…

Another account that’s seen a rate cut is the Santander Edge Saver, a popular one for our readers as it had offered a cracking 7% for one year on balances of up to £4,000 – as long as you had an Edge current account.

The headline rate on this has dropped to 6%, which is still one of the strongest options out there, but importantly, this change is just for new applicants. If you already have the account you’ll still get 7% for your first year.

…but cuts it to 6% just for new customers

However, for newbies, you will get 6% at most. And it’s worth remembering that unless you avoid the connect current account’s £3fee (by not setting up any direct debits) or cover it via cashback on bills, that will eat into your returns and reduce the real interest rate.

Here’s what it would look like based on incremental amounts saved:

Amount saved	Annual Interest	Interest after £36 fee	Effective interest rate
£500.00	£30.00	-£6.00	-0.60%
£1,000.00	£60.00	£24.00	2.40%
£2,000.00	£120.00	£86.00	4.3%
£3,000.00	£180.00	£144.00	4.80%
£4,000.00	£240.00	£204.00	5.10%

There’s more detail, as well as the “real” rates if you have additional savers, in our review of the Edge Saver account.

Virgin releases 10% regular saver

While all these cuts are happening, there’s been a surprise new account with a huge 10% return. This is a regular saver from Virgin Money. We’ve covered it in detail in a separate review with everything you need to know about the account.

NS&I launch new bonds

More new accounts released this week include more Guaranteed Grown Bonds from NS&I. Last year we had the very good and very popular 6.2% one year fix. So how do the latest compare?

Well, there’s no one year bond this time. Instead you’re looking at longer fixes:

• 2 years at 4.6%
• 3 years at 4.35%
• 5 years at 4.1%

These rates are decent enough, but can still be beaten, as the best buys further down this article show.

If you had the one year bond last year you will be able to renew with the existing savings for another 12 months at a more competitive 5.15%.

Despite coming from NS&I, unlike Premium Bonds these are not tax-free, though you can choose whether you want payments annually or at maturity (important when thinking about tax on your interest earned).

The only real advantage of these over better paying options is you are protected up to £1m, rather than the usual £85,000 FSCS cover.

Could Premium Bonds cut the prize rate?

Sticking with NS&I, their annual report showed they’d made £11.3bn more than required in 2023/24. That sounds good, but it actually means too many people wanted to save with them. So, along with the base rate cut, expect the Premium Bond prize rate to fall. We’ll update you if it happens.

Family Building Society release windfall bond

If you like the idea of a prize draw with your savings, then a new account from Family Building Society is worth a look. It claims the chances of winning a prize are higher than with Premium Bonds.

You’ll have the chance to win tax-free prizes every month. The actual amount given away will depend on how much has been saved in the accounts by all account holders. But based on 12,000 bonds, it could be:

• 1 prize of £50,000
• 2 prizes of £10,000
• 15 prizes of £1,000
• 15 prizes of £500
• 75 prizes of £100

You’ll qualify for interest straight away, but only put in the pot for the draw in the second calendar month after opening. So open now in August and you’ll be in the October draw.

In addition you’ll earn interest, which follows the base rate, though it doesn’t actually drop to 5% until 1 September 2024. So that’s not bad in comparison to other notice accounts.

There’s a minimum £10,000 you can save, and a maximum of £50,000. You’ll have to give 35 days notice to make any withdrawals.

Trading212 Cash ISA transfers resume

Last month Trading212 started processing all transfers on Cash ISAs, so if you’ve been waiting and still haven’t started the process, you’re good to go.

August’s savings offers

No new offers this month.

Top savings accounts for August 2024

Remember, these are the accounts at the top of the tables. We’ve more options in our best savings accounts page, which is updated every day by the team.

Current account linked saver picks as of 7/8/24

• Santander Edge Saver (6% AER variable, includes 1.5% bonus for 12 months): min £0 / max £4,000
• Ulster Bank (5.2% AER variable): min £5,000 / max £1m (part of Natwest/RBS)
• Barclays Blue Rewards Rainy Day Saver (5.12% AER variable): min £0 / max £5,000

Easy & limited access picks as of 7/8/24

• Cahoot Sunny Day Saver (5.2% AER variable for 12 months): min £1 / max £3,000 (part of Santander)
• Principality Building Society Online Bonus Triple Access (5% AER variable — includes 1.4% bonus for 12 months): min £1 / max £1m
  • 3 withdrawals a year
• QIB via Raisin (4.9% expected profit variable): min £1,000 / max £85,000
• Close Brothers (4.9% AER variable): min £10,000 / max £2m
• UBL via Raisin (4.87% expected profit variable): min £10,000 / max £85,000
• Cahoot (4.85% Variable): min £1/ max £2m

Easy access from investment accounts pick as of 7/8/24

• Trading 212 (5.2% APY): min £0 / max N/A – see full analysis here.

Notice accounts picks as of 7/8/24

• 30 days notice Vanquis Bank (5.05% AER variable): 30-day notice: min £1,000 / max £250,000
• 2 month notice Vanquis Bank (5.3% AER variable): 60-day notice: min £1,000 / max £250,000
• 3 months notice Vanquis Bank (5.35% AER variable): 90-day notice: min £1,000 / max £250,000
• 4 months notice Vanquis Bank (5.2% AER variable): 120-day notice: min £1,000 / max £250,000

Fixed savings accounts picks as of 7/8/24

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

• 3 months Bank of the Philippine Islands via Raisin (5.09% AER fixed): min £5,000 / max £85,000
• 6 months National Bank of Egypt via Raisin (5.06% AER fixed): min £10,000 / max £85,000
• 9 months National Bank of Egypt via Raisin (5.03% AER fixed): min £10,000 / max £85,000

• 12 months Al Rayan Bank via Raisin (5.2% expected profit rate fixed): min £1,000 / max £85,000
• 18 months Allica Bank (4.85% AER fixed): min £10,000 / max £250,000

• 2-year Harpenden Building Society (4.96% AER fixed): min £1,000 / max £1m
• 3 year fix Birmingham Bank (4.71% AER fixed): min £5,000 / max £250,000
• 4 year fix Oxbury Bank (4.31% AER fixed): min £1,000 / max £500,000
• 5 year fix Al Rayan Bank via Raisin (4.55% expected profit rate fixed): min £5,000 / max £1m
• 7 year fix BLME (4% expected profit rate fixed): min £1,000 / max £1m

Regular Saver accounts picks for current account holders as of 7/8/24

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

• Virgin Money Regular Saver Exclusive (10.38% AER fixed until 31 July 2025): min £0 / max £250 a month (requires a Virgin Money current account) – full review
• First Direct (7% AER fixed) – min £25 / max £300 (requires current account)
• Co-operative Bank Regular Saver (7% variable) – min £1 / max £250 a month (requires a current account)
• Nationwide Flex Regular Saver (6.5% AER variable) – min £1 / max £200 per month (max 3 withdrawals per year, after which your rate drops to 2.15%. (Requires Nationwide current account) – full review

Regular Saver account picks for all as of 7/8/24

• Principality Building Society 6-month regular saver (8% AER fixed): min £0 / max £200 a month
• Progressive Building Society Online Regular Rainy Day Saver (7% AER variable): min £20 / max £300 per month

ISA picks as of 7/8/24

You can keep an eye on the tables (we update them every day) in our best Cash ISA accounts article.

• Easy access Trading212 (5.2% AER variable)
• 1 year Virgin Money (5.05% AER fixed) – requires current account
• 1 year Kent Reliance (4.91% AER fixed)
• 2 years Beehive Money (4.73% AER fixed)
• 3 years United Trust Bank (4.55% AER fixed)
• 4 years UBL (4.05% AER fixed)
• 5 years UBL (4.26% AER fixed)
• Lifetime Dodl by AJ Bell (5.09% AER as uninvested cash in Stocks & Shares LISA)