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 – not just to earn the biggest possible return but also to ensure you earn more than inflation. This is key as anything below inflation is losing value in real terms,

The latest inflation rate (for September 2020) was a low 0.5%. This rate means more savings accounts beat it now than in recent months, but the vast majority of accounts are well below this.

And regardless of whether you’re getting above 0.2% you want to get as high as you can. This guide takes you though what’s available right now.

(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 in the middle of the month.)

Here’s my monthly video round-up from mid-October 2020.

Best Regular Savings accounts – up to 3.04%

These accounts are all Regular Savings.

Regular or monthly savers 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.

Natwest / RBS (Regular saver) – 3.04%

This account launched in late September and 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. Here’s my review of the account and more information on how it works.

First Direct (Regular Saver) – 2.75%

This is my top pick as it allows monthly deposits of up to £300. Pay in the full amount over a year and you’ll make £53.40 in interest.

HSBC (Regular Saver) – 2.75%

The monthly maximum with HSBC is a slightly lower £250 a month, meaning you can put aside £3,000 over a year and earn up to £44.50 in interest. 

Marks & Spencer Bank (Monthly Saver) – 2.75%

This is the third regular savings account. You’ll be able to save a maximum of £250 a month. It’s only open to customers who switch or have switched an account in.

Coventry Building Society (Regular Saver) – 1.55%

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. In fact it’s recently dropped from 1.85% to 1.55% for new accounts (and it was 2.5% only a few months back). You can however pay in a much larger £500 a month. 

Lloyds Bank (Monthly Saver) – 1.5%

Sadly this account has dropped from 2.5% to 1.5%. You must have a Club Lloyds bank account (which comes with a free magazine subscription) to open this monthly saver. You can pay in a max of £400 a month and get interest to your account after a year.

If you have a standard Lloyds account the monthly saver rate is a lower 1% and there’s a limit of £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 (current account) – 2.02%

This relatively new 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.

Halifax Reward (current account) – 1.2% (equivalent)

The Halifax Reward account changed in June. Existing customers need to opt-in, but if you do it’s possible to 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.

Best fixed savings accounts – up to 1.01%

The above accounts all have caps on how much you can save. You’d need £4,500 to max out the Nationwide, TSB 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.

Atom (One year Fixed savings account) – 1.01%

This account from Atom Bank is one of the top fixed accounts, and allows a minimum deposit of £50.

Best easy access savings accounts – up to 0.96%

Coventry Building Society 0.96% (Two withdrawals a year)

This account from Coventry BS will let you take money out twice a year – so it’s only for those who don’t think that’ll be a problem. The rate is variable, so it could change at any time (in fact it dropped from 1.2% to 1.1% days after adding it here). And since the Regular Saver from Coventry has been cut twice in the last few months I wouldn’t be surprised if the same happens.

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.

Al Rayan Bank – 1.27%

The return on this one year fix will be 1.27%. There’s a minimum deposit of £5,000. More on Sharia accounts below.

Triodos (Regular saver) – 1.25%

Triodos is regularly seen as the most ethical bank. This regular savings account pays 1.25% for one year and you can save between £50 and £500 a month.

Best Sharia accounts – up to 1.27%

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) – 1.27%

The return on this one year fix will be 1.27%. There’s a minimum deposit of £5,000.

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.

Check out all the latest banking deals:

The best bank switching, cashback, interest & overdraft offers (October 2020)

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