Here are my top places to put your cash to make as much as 3%.
We’re a long way now from when we could get 5%, with rates slowly dropping over the last few years. And following the Bank of England base interest rate cut to an all-time low of 0.1%. those cuts have happened even faster. Accounts can disappear days after becoming available, and rates continue to fall.
You want to make sure you’re getting the best rate on your savings, and this article will take you through the best options right now.
You also want also to ensure you earn more than inflation. This really is key as anything below that rate is losing value in real terms,
(This article is updated at the start and the middle of each month after inflation rate announcements and any significant account changes. New videos are usually at the start of the month.)
My top three savings accounts for 2021
To keep things simple and get the best rate for emergency cash funds, check out my article listing the three accounts to cover your savings.
Here’s my monthly video roundup from early April 2021
Best Regular Savings accounts – up to 3.04%
These accounts are all Regular or monthly savers which work differently to normal saving accounts.
For a start, there’s a limit to how much you can save each month, and the interest is calculated on the balance each month. After 12 months the interest is paid and your saver closed. But you can then open up another and begin again.
These are ideal if you only have a certain amount of money to put aside each month, or to move money every month from a lower-paying easy access account. Here’s my full guide to how they work.
You can only open the top accounts if you have or open a current account with these banks – but that’s no reason to put you off.
Sadly the market leading accounts from First Direct, HSBC and M&S Bank all cut rates for new customers to 1% in late November 2020.
Natwest / RBS (Regular saver) – 3.04%
This account offers a massive rate but with a few restrictions. The biggest is you can only save £50 every month. Not far behind is that interest will only be paid on the first £1,000 saved.
It’s only open to Natwest or RBS customers – though . Here’s my review of the account and more information on how it works.
Coventry Building Society (Regular Saver) – 1.05%
This regular saver from Coventry Building Society doesn’t require a current account so anyone can open it. The rate is variable so it can change at any time (and dropped mid-Feb from 1.3%). You can however pay in a decent £500 a month.
Other bank offers (Regular Savers) – up to 1%
The Halifax regular saver is open to all, while the latter four accounts are only open to current account customers. Though a long way from their previous high rates, they are still among the highest paying if you’ve already used the above accounts.
- Club Lloyds Monthly Saver (1% fixed) – up to £400 a month
- First Direct Regular Saver (1% fixed) – up to £300 a month
- HSBC Regular Saver (1% fixed) – up to £250 a month
- Nationwide Start to Save (1% variable and quarterly prize draw) – up to £100 a month
- TSB Monthly Saver (1% fixed) – Up to £250 a month
- Halifax Regular Saver (0.75% fixed) – up to £250 a month
Best high-interest current accounts
All of these accounts can be opened by anyone, you don’t need to be an existing customer. Two options are a current account so you can save more upfront at this rate, the other is another regular saver at a lower rate.
Nationwide FlexDirect (current account) – 2%
This is the highest paying account, and you can access your money at any time. However the amount of money you can save in it is limited.
You can get 2% for one year on a balance up to £1,500 with the FlexDirect account. You do need to pay in £1,000 a month to get this rate.
After the first year it will drop to 0.25%, but you can always switch away when that happens (and hopefully get a nice cash bonus for doing so).
You’re able to get the 2% on both a solo account and a joint account, so it’s worth opening a joint account too if you’re in a relationship (though watch this video first).
Virgin Money M Plus (current account) – 2.02%
This account from Virgin Money will pay 2.02% on up to £1,000. So though it’s a fraction better than Nationwide, I’ve put it second as you can save less there.
You can also get a linked 0.5% savings account, though the rate on this extra account will drop on 27th April 2021 to 0.35%.
Halifax Reward (current account) – 1.2% (equivalent)
The Halifax Reward account changed in 2020 and customers can get £5 a month as a “reward”. There are two ways to get this.
One is spending £500 on your debit card (though other cashback credit cards can beat this), or you can get if there is £5,000 in your account every day of the month.
If you do this every day of the year, you’ll get £60, which though it’s not interest, is the equivalent of 1.2%.
However, have less in the account for just one day of a month and you get nothing. And £5k is a lot of money for most people, especially as you can get better rates at Nationwide and TSB first.
So it’s better to use the debit card option and see it as cashback rather than a savings option.
Here’s my rundown of how this Rewards account will work.
Club Lloyds (current account) – 0.78% (equivalent)
This current account has suddenly become a lot more appealing for savings. As long as you have two direct debits going out, you’ll get 0.6% on balances up to £3,999 and then 1.5% between £4,000 and £5,000. So that’s the equivalent to 0.78% if you have the full £5.000 saved.
You also get access to the above mentioned 1.5% regular saver, and there are freebies with the account such as monthly movie rentals or a magazine subscription. Make sure you pay in £1,500 a month to avoid a £3 monthly fee.
Best app based savings – up to 1.25%
Chip +1 (Savings app) – 1.25% & Bonus £10
This is an easy-access account but with a few differences. For a start you’ll only earn the interest on the first £10,000 and you won’t earn compound interest.
Plus there’s a fee on top if you want to save between £2,000 and £10,000, which reduces the rate you’ll earn in real terms. If you have the full £10,000 saved it works out as 1.06%.
But all in it’s a decent bet if you’ve used the above. Here’s my full review, including the VIP invite code you’ll need to access the account.
BONUS £10 IN APRIL
You can also get a bonus £10 if you open a Chip+1 account in April 2021 with the VIP code CLEVER10.
To qualify you also need to sign up to the ChipAI subscription (£1.50 every 28 days) and stay on it until at least 8th July 2021. You get the first month free. Depending on when in April you sign up and if you do cancel on the 9th July, you could pay:
- Before 16th April you’ll pay £4.50
- Between 16th April and 30th April you’ll pay £3
Offer ends 30th April. The bonus is paid in July, after the 8th and before the 22nd. You can read the full terms and conditions here.
Best fixed savings accounts – up to 0.65%
The above accounts all have caps on how much you can save. You’d need £2,500 to max out the Nationwide, and Virgin accounts. Then it’s a case of pushing the money into the higher paying regular savers.
But what should you do with any additional money? You can still beat most standard savings or current accounts where you’re likely to get less than the base rate of 0.1%.
You can also fix your savings for a year or longer and get a slightly better rate in return. However, you need to be sure you won’t need access to that cash over that time. The longer you fix, the greater the risk you’ll lose out if rates were to rise. But at the same time, they’re protected if rates were to continue to fall.
The best accounts are dropping or closing daily (even hourly) at the moment.
Ahli United Bank via Raisin (one year fix) – 0.65%
The minimum deposit on this account from Ahli United Bank is £1,000 and you’ll get 0.65% interest. It’s via a site called Raisin and there’s the potential for a £5+ bonus when you first use it as long as you pay in at least £5,000.
Zopa (One year Fixed account) – 0.59%
This one year fix from Zopa pays 0.59%. The minimum deposit is £1,000. There are no early withdrawals, even for a fee.
Best notice account – 0.6%
A notice account means you have to request to get your money and interest, which will be released after a set time. They often have a variable rate but if there’s a cut you’ll normally have notice.
Money Box (95 days notice) – 0.6%
This account from savings app Moneybox as a 95 day notice and offers a rate of 0.6%. Minimum deposit is £1.
Best easy access savings accounts – up to 0.41%
Rates are incredibly poor for these accounts and getting worse!
Paragon – 0.41%
A smidge better than other easy access accounts is this one from Paragon.
Marcus – 0.4%
This account from Marcus offers 0.4%. You can start with £1.
Best Cash ISA – up to 0.41%
Paragon Cash ISA – 0.41%
Though most of us don’t need the tax-free “wrapper” offered by an ISA, if you are wanting to use one then Paragon Bank is offering 0.41% variable. It allows transfers in.
Read my article looking at how Premium Bonds compare to other savings accounts.
Broadly, if you have £10,000 saved you’ll likely win £75 in a year, the equivalent to 0.75%, increasing to above 0.9% the more saved.
Best children’s savings account
I’ve written in more detail about the different savings accounts for kids, so do check that article out.
Halifax Kids’ Monthly Saver – 3.5%
You can save between £10 and £100 a month into this regular saver with Halifax and earn 3.5% AER (Fixed) for 12 months.
Coventry Building Society Junior ISA– 2.25%
It’s a decent rate on this Junior ISA with Coventry, but it’s variable so could change. There’s a minimum deposit of £1.
HSBC MySavings – 2.5%
The MySavings account from HSBC pays 2.5% AER (variable) on up to £3,000 saved. Above this amount you’ll only get 0.25%. There’s a minimum deposit of £10.
Best ethical savings account
The money you hold in your savings is used by the banks to invest and lend money. This could mean it’s used for things you might disagree with, such as fracking, tobacco or arms manufacturing.
There are banks with ethical policies such as Triodos, while building societies must lend 75% of their funds to home buyers, meaning they don’t have the cash to invest elsewhere. Sharia accounts can’t be used for things against Islamic law, like tobacco or gambling.
Nationwide FlexDirect – 2% (Current account)
This current account gives 2% on up to £1,500. It’s fixed for one year. Read more about this above.
Ecology Building Society – 0.8% (Regular saver)
This is a variable rate regular saver from Ecology paying 0.8% with a minimum of £25 and maximum of £250 a month.
Al Rayan Bank (one year fix) – 0.55%
The expected return on this Sharia account is 0.55% with Al Rayan Bank, with a minimum deposit of at least £5,000. No early withdrawals permitted.
Best Sharia accounts – up to 0.65%
Paying interest isn’t allowed in Islam, so a Sharia-compliant savings account instead promises a return on the money saved – an expected profit rate. Though technically this means the rate isn’t guaranteed, it’s not happened yet. They’re open to everyone, not just Muslims.
Al Rayan Bank (one year fix) – 0.65%
The expected return on this Sharia account is 0.65% with Al Rayan Bank, with a minimum deposit at least £5,000. No early withdrawals permitted.
Finding the latest savings rates
I’ll update this page regularly (check the published date to see when it last happened), but if you find a rate has been cut or isn’t available, you can check the Savers Friend website.
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