February 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.

February’s savings update video

February’s savings news

Base rate likely to increase again, while inflation drops to 10.5%

It’s widely predicted there’ll be another increase to the base rate as set by the Bank of England on Thursday 2 February. It now sits at 3.5% and could go to 4% this week. Meanwhile inflation has dropped a little to 10.5%, but that’s still very high. After the Thursday meeting, I’ll add my full analysis here.

Easy, limited and notice access rates edge up

Ahead of the next potential base rate announcement, a handful of accounts have increased their rates. Notable ones that place accounts at the top of their respective tables include:

Easy access

• Chip: 3.04% from 11 February 2023 (more on other changes to Chip below)
• Kroo: 3.03% from 1 February 2023 (This is a current account – I’ve got a review coming soon)
• Shawbrook Bank: 2.92%
• Cynergy: 2.9%

Tandem also increased its rate to 2.75% though this required existing customers to manually activate this top-up.

Limited access

• Yorkshire Building Society: 3.25% on up to £5,000, then 2.85% (max two withdrawals a year)
• Sainsbury’s Bank: 2.92% (max three withdrawals a year)

Notice accounts

• Hinkley & Rugby Building Society: 3.6% for 120 days notice

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

Building Societies pull top rates before release

In previous updates and in my weekly newsletter I’ve shared a couple of forthcoming rate increases from Coventry Building Society and Yorkshire Building Society which put their respective accounts top of the tables.

Sadly on the day of the hikes, the accounts offering these rates were pulled for new customers, meaning only existing account holders got the cash. In their place were lower-paying (though still decent) accounts.

I think the lesson here is if you see an account you like the look of with a rate increase announced but yet to happen, don’t wait for the change to open the account.

Fixed rates continue to fall

In my update last month I reported how fixed rates were falling after long-term base rate predictions dropped from above 6% to around 4.5%. And that’s continued for most accounts, with the best one-year fix now down to 4.21%.

Broadly it does still feel like if you want to fix for a year, there’s no point waiting for those rates to improve. You just need to be happy with the knowledge that things could go up or down again next year. Make sure you keep an eye on my best buy list of all the options.

One-year fixed Cash ISA hits 4.25%

Virgin Money as released a one-year fixed Cash ISA for it’s current account customers paying a really decent 4.25%. This puts it above the best one-year fix.

TSB boosts regular saver to 5%

TSB has joined most of the other major banks by offering 5% on it’s regular saver. You can pay in a maximum of £250 a month over the course of the 12 months. You need a TSB current account.

YBS adds Christmas regular saver

Elsewhere, Yorkshire Building Society has a Christmas regular saver that matures in October so it’s handy if you want a decent rate by don’t want to wait a year. It pays 4.5% and you can add up to £300 a month.

Premium Bonds increase to 3.15% prize rate

NS&I has revealed that Premium Bonds will have a prize rate of 3.15% from February 2023, the second hike in as many months. However, the other easy access increases I’ve written about above, with more likely to follow, mean it’s still lagging behind guaranteed rates elsewhere. Here’s more on the Premium Bond change, and why it doesn’t mean you’ll get a 3.15% return.

Chip Instant Access to become “normal” savings account

One of the issues I’ve had with the recent easy access account from Chip is that rather than get interest you earned a bonus. And this bonus didn’t compound, wasn’t protected by FSCS and was only accessible if you withdrew the full balance!

That’s all going to change on 11 February 2023, when the account will operate like a normal savings account. The rate will also change from 3% AER to 3.04% – though there’s the chance it’ll increase again before then depending on whether the base rate goes up too.

The savings app recently ran a £20 refer-a-friend offer, so it might be worth holding off opening the account for a while incase this returns.

Starling launches fixed rate saver

You can now open a fixed-rate savings account with Starling, though it pays 3.25% which is a fair bit below the best buys. Even so it’s one to keep an eye on for the future.

Club Lloyds increase in April

Years ago the Club Lloyds interest rate was one of the best options, albeit on balances up to £5,000. It’s languished for a while, but from April there’ll be a much-needed hike.

The interest rate is split depending on your balance:

• Balances from £1 to £3,999 – 1.5% (up from 0.6%)
• Balances from £4,000 to £5,000 – 3% (up from 1.5%)

Sadly both these rates are still easily beaten. And even if you had the full £5,000 saved you’d get an average return of 1.8%.

Where to put your savings in February 2023

Make sure you check for updates in my regularly updated savings best buy article, and of course you might have existing accounts closed to new customers with better rates.

Of course you can fix your money for better rates, or if you’re happy to have your money in lots of different places you can mix and match the options. But if you’re looking for relative simplicity right now I’d look at the following easy access accounts:

Best places to save up to £5,000

The highest paying option for the first £5,000 is the Barclays Blue Rewards Rainy Day Saver via a current account.

Amount saved	Account	Rate	Notes
£5,000	Barclays Blue Rewards Rainy Day Saver	5.12%	Can only earn interest on the first £5,000 saved and requires two direct debits a month to cancel out a £5 monthly fee

Best places to save between £5,000 and £9,000 (possibly up to £17,000)

Next up I’d look to put additional income into the Santander Edge saver. There’s also the potential to open an extra Edge account as a joint account and get two more Edge savers with this.

However the monthly fee will impact your interest so you’ll want at least £3,600 in accounts where this charge isn’t covered by cashback on bills. More is explained here.

Amount saved	Account	Rate	Notes
Up to £4,000	Santander Edge Saver	4%	Assumes £3 fee is cancelled out by cashback on bills
Up to £8,000	Two Santander Edge Savers (via joint account)	Up to 3.55%	Opening an additional joint Edge current account means you can get two Edge Savers.

Best places to save more than £9,000 / £17,000

If you can’t do all or some of the Edge options, then there’s a decent rate on an ISA from Virgin Money though it’s fixed. Or there are some decent easy-access accounts.

Amount saved	Account	Rate	Notes
Up to £20,000 (more if transferred)	Virgin Money 1- year fixed ISA	4.25%	Requires a current account, fixed for 12 months
Up to £250,000	Chip	3.04% from 11 February	App only
Up to £85,000	Kroo	3.03% from 1 February	App only
Up to £50,000	Yorkshire Building Society	2.9%	Ethical option. Higher rates above £50,000 saved

Best places for ongoing savings

If you are saving money every month then these accounts will beat the above accounts. You could also drip feed from easy-access accounts to boost existing savings. Read more on regular savers here.

Max amount saved per month	Account	Rate	Notes	Max annual interest
£300	First Direct Regular Saver	7%	Current account required	£135
£400	Club Lloyds Regular Saver	5.25%	Current account required. Full review here.	£135
£150	Natwest Digital Regular Saver	5.12%	Current account required. You can save up to £5,000 and get 5.12% interest. It’s a flexible account so you can take money out and pay it back in. There’s also no set end date like with many regular savers	£50 (in first year)
£150	RBS Digital Regular Saver	5.12%	You can have both the RBS and Natwest accounts, though you’ll need a current account with both	£50 (in first year)
£250	HSBC Regular Saver	5%	Current account required	£81
£250	TSB	5%	Current account required	£81
£250	Halifax Regular Saver	4.5%		£73

Best places for locking savings away

If you are willing to lock money away for a set time then better rates are available in a fixed bond.

Length of fix	Account	Rate	Notes
Nine months	Atom	3.75%
12 months	Virgin Money ISA	4.25%	requires current account
12 months	Smart Save	4.21%