December 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.

December’s savings update video

December’s savings news

The good news: loads of rates now beat inflation

Inflation dropped to 4.6%, just a little lower than expected, in October. That means you can now beat inflation with pretty much every type of savings account. I’ll share the best ones below.

The bad news: rates are falling fast on fixes

As a result of this, markets are pricing in an earlier cut to the base rate than predicted. And that’s meant big cuts across fixed rate deals. I’ll go into more detail below, but this table shows the changes to the best paying accounts at the time of writing, compared to my update last month.

Account type	Best rate 6 December 2023	Best rate 8 November 2023	Change in percentage points
Easy/Notice
Current account linked	7%	7%	+0%
Easy access	5.22%	5.2%	+0.02%
Limited access	5.16%	5.16%	+0%
90-day notice	5.51%	5.51%	+0%
120-day notice	5.5%	5.56%	-0.06%
Regular
Linked	8%	8%	+0%
Open to all	7%	5.5%	+1.5%
Fixes
6 month fix	5.49%	5.58%	-0.09%
9 month fix	5.55%	5.6%	-0.05%
12 month fix	5.8%	5.9%	-0.1%
2 year fix	5.5%	5.9%	-0.4%
3 year fix	5.35%	5.9%	-0.55%
4 year fix	5%	5.6%	-0.6%
5 year fix	5%	5.6%	-0.6%
ISAs (open to all)
Easy access ISA	5.08%	5.15%	-0.07%
1 year fix ISA	5.65%	5.85%	-0.2%
2 year fix ISA	5.3%	5.61%	-0.31%
Lifetime ISA	4.25%	4.25%	+0

Metro offers table topping rates – but is it safe?

When we go through the top accounts this month, you’ll see Metro Bank feature at the top for a number of options. You might be tempted to open an account with them and transfer your cash, but you might also be worried about headlines in the press recently about problems at the bank.

First there was a rescue deal agreed by shareholders to ensure it could keep going, and then there was an announcement that branch hours would be reduced and staff made redundant.

So is it risky to put your savings in this troubled bank? Well, broadly the answer is no – as long as you don’t deposit more than £85,000 in the bank. That’s because your cash is protected by the Financial Services Compensation Scheme (FSCS), so you’ll get your cash back if the bank did go under.

Beyond that I couldn’t say. The new investment and changes coming in will hopefully secure it’s future, but there’s obviously more of a risk with Metro Bank than say Lloyds or Chase right now. You’ll have to weigh up whether the rates are worth it compared to the next best options.

Fixed rates falling even faster

Last month rates had dipped below 6% for the first time in a while. A month on and they’ve fallen further, especially on longer fixes.

There’s still the chance one or two providers will come in with a higher rate to bring in some deposits. Briefly there was a 5.85% three year fix – but that lasted just a few days. But broadly the latest inflation figures and interest rate predictions mean we won’t get much better

Top for one year and 18 month is Metro, offering 5.8% on both. The biggest drops have been on three to five year fixes, with BLME the best bet there.

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. So check what’s best for you when you apply.

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 6/12/23

• 6 months Monument Bank (5.49% AER fixed): min £25,000 / max £400,000
• 9 months Monument Bank (5.55% AER fixed): min £25,000 / max £400,000
• 12 months Metro Bank (5.8% AER fixed): min £500 / max £2m
• 15 months United Trust Bank (5.45% AER fixed) min £5,000 / max £1m
• 18 months Metro Bank (5.8% AER fixed): min £500 / max £2m
• 2-year Loughborough Building Society (5.5% AER fixed): min £5,000 / max £250,000
• 3-year BLME (5.35% expected profit rate fixed): min £1,000 / max £1m
• 4 year BLME (5% expected profit rate fixed): min £1,000 / max £1m
• 5 year BLME (5% expected profit rate fixed): min £1,000 / max £1m

Green Bonds cut dramatically

A big blow to those hoping to save ethically. The rate on NS&I’s Green Savings Bond was reduced from 5.7% to just 3.95% in the middle of November. This applies to new applicants only. Subsequent drops on other fixed rates mean the difference isn’t quite so stark, but it’s still a disappointment.

NS&I hits funding targets

And a big reason for this drop, and perhaps a sign of what to expect from NS&I in coming months, is that the government revealed at the Autumn Statement that targets had been exceeded for the year. That’s not the calendar year, that’s the financial year.

A big part of that was the market leading one year bond paying 6.2% a few months ago, and a handful of hikes to Premium Bond prize rates over the year.

It means there’s no need for NS&I to offer any special rates to get our cash over the next few months as there’s no need for it to compete for our cash.

New 7% regular savers

There are a couple of new Regular Savers to share. One is open to all, you don’t need a current account like some of the best buys. It’s via Gatehouse and it pays 7%. You can save up to £300 a month.

The other is for Coventry Building Society customers who’ve had a savings or mortgage account with them since January 2022 (so almost two years!). Also paying 7%, the max you can add is £250 a month.

We’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 6/12/23

• Nationwide Flex Regular Saver (8% 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
• First Direct (7% AER variable) – min £25 / max £300 (requires current account)
• Gatehouse Bank Regular Saver (7% expected profit rate variable) – min £1 / max £300 per month
• 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)

• 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
• Yorkshire Building Society Loyalty Regular eSaver (7% AER variable) – min £1 / max £500 a month
  • You must have had an open account (Savings or Mortgage) with Yorkshire Building Society for at least 12 continuous and consecutive months prior to the date of application and already be registered for online access. 
• Coventry Building Society Loyalty Regular Saver (7% AER variable) – min £1 / max £250 a month
  • You must have had an open account (Savings or Mortgage) with Coventry Building Society since 1 January 2022.

Easy access edges up to 5.22%

A few more providers are fighting it out at the top for easy and limited access accounts. Metro (again) is right at the top, with 5.22%. New below this are DF Capital and Cahoot at 5.2%, though the latter is only on balances up to £3,000.

When it comes to Notice accounts, a new 2 month option from Monument pays 5.41%, which isn’t too bad for short term savings. Longer notice accounts have dropped slightly.

Current account linked saver picks as of 6/12/23

• Santander Edge Saver (7% AER variable, includes 2.5% bonus for 12 months): min £0 / max £4,000
• Barclays Blue Rewards Rainy Day Saver (5.12% AER variable): min £0 / max £5,000

Easy access picks as of 6/12/23

• Metro Bank (5.22% AER variable includes bonus for one year): min £500 / max £2m
• DF Capital (5.2% AER variable): min £1,000 / max £250,000
• Ulster Bank (5.2% AER variable): min £5,000 / max £1m (part of Natwest/RBS)
• Cahoot (5.2% AER variable for 12 months): min £1 / max £3,000 (part of Santander)
• Beehive Money (5.15% AER variable, includes a 2.5% bonus until 30/11/2024): min £1,000 / max £85,000
• Cahoot (5.12% AER variable): min £1 / max £2m (part of Santander)

Limited access picks as of 6/12/23

• Paragon Bank (5.16% AER variable): min £1,000 / max £500,000 – 2 withdrawals per year
• Virgin Money (5.12% AER variable): min £1 / max £250,000 – 3 withdrawals per year

Notice accounts picks as of 6/12/23

• 2 months notice Monument (5.41% AER variable): 60-day notice: min £25,000 / max £400,000
• 3 months notice Hampshire Trust Bank (5.51% AER variable): 95-day notice: min £1 / max £250,000
• 4 months notice Earl Shilton Building Society (up to 5.7% AER variable): 120-day notice): min £500 / max £180,000
  • 5.7% paid at £50,000
  • 5.5% paid at £25,000
  • 5.3% paid at £10,000
  • 5.1% paid at £5,000
  • 4.9% paid at £500
• 6 months notice United Trust Bank (5.58% AER variable) 200-day notice: min £5,000 / max £1m

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

ISAs all falling

Another area where some of the highest rates are from Metro, though for ISAs there’s a catch – you can only open them in branch.

Elsewhere rates have all dropped

We’ll update the tables (as we do every day) in our best Cash ISA accounts article.

ISA picks as of 6/12/23

• Easy access (branch only) Metro Bank (5.11% AER variable)
• Easy access Zopa  (5.09% AER variable)
• Limited access Moneybox (5.09% AER variable) max 3 withdrawals
• Flexible fixed Barclays Bank 1-Year Flexible Cash ISA (5.25% AER variable)
• 1 year (branch only) Metro Bank (5.71% AER variable)
• 1 year Virgin Money (5.65% AER variable) – requires current account
• 2 years Hinckley & Rugby Building Society (5.3% AER fixed)
• 3 years Secure Trust Bank (4.86% AER fixed)
• 4 years Gatehouse (4.7% expected profit rate fixed)
• 5 years Hinckley & Rugby Building Society Five year fix (4.9% AER fixed)
• Lifetime Moneybox (4.25% AER, drops to 3.5% after one year)

Where to put your savings in December 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

The best rate is via Santander’s Edge Saver so it’s worth a look. But if you want to keep things simple, I’d look at using Ulster Bank for anything beyond this you need access to.

Amount saved	Account	Rate	Notes
Between £2,000 and £4,000	Santander Edge Saver	7%	£3 monthly fee
Between £5,000 and £85,000	Ulster Bank	5.2%

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 Nationwide Flex Regular Saver. There’s also a £200 switching bonus to go for if you’re not already a customer.

Amount saved	Account	Rate	Notes
Up to £200 a month	Nationwide Flex Regular Saver	8%	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)	Virgin Money 1 year ISA	5.65%

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. Beehive Money is part of Nottingham Building Society.

Amount saved	Account	Rate	Notes
Up to £85,000	Beehive Money easy access	5.2%