June 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.

June’s savings update video

June’s savings news

Inflation goes below 10% & base rate up to 4.5%

Inflation is important as if savings make less than inflation, they’re losing value in real terms. Sadly, it’s been huge for a long time now. But the good news is it fell from 10.1% to 8.7%, making it the first time it’s dropped below double digits since August last year (and that was 9.9%).

However, that was higher than expected, and the markets are forecasting as a result the base rate of interest will go above 5% this year. Potentially to 5.25%.

That’s a lot more than the Bank of England’s minutes suggested on 11 May they increased the base rate from 4.25% to 4.5%. Both that hike and the latest predictions has meant another month of interest rates improving on savings – and they’re reflected in the top picks in this article.

We’ll find the next Bank of England inflation predictions, along with news of whether base rate will change again on 22nd June 2023.

Limited access accounts hit 4.5%

You can now get a huge 4.5% interest from the Hanley Economic Building Society – though it’s got a few catches.

The main one is that this is a postal only account (unless you live near a branch in Staffordshire). The second is you can only make one withdrawal a month.

Initially I looked into this and though it would be too much hassle, especially with the website indicating you’d need to also post over copies of your ID and a cheque with your initial deposit.

However, I gave the Hanley a call and was told the following:

  • They’ll only ask for certified copies of ID if electronic ID checks fail
  • You can include a covering letter saying you don’t have a chequebook. You’ll have 7-days from opening to then electronically transfer over your initial £1,000 (or more)
  • There’s a freepost address for sending your passbook to the Building Society when making withdrawals
  • You can withdraw up to £10,000 by electronic transfer without a fee

What’s more, this account tracks the base rate, with any hike (or cut) reflected on the first of the following month. So with rates expected to increase it sounds like a decent bet – as long as you don’t need to take money out regularly or fast.

One problem is that there’s currently a 10 day turnaround for opening the account. You’ll find the application form here.

Limited access picks as of 1/6/23

The top accounts this month include:

Easy Access rates up again to 3.82%

Chip is still top of the table, though it’s now paying an improved 3.82%, up from 3.71% this time a month ago. The bonus offer was paused in early May, but is set to return in June. You’ll get the chance to earn an extra between £10 and £50 depending on how much you save – though the money has to be kept there for six months.

Once again Chip’s increase was in response to a hike to competitors Shawbrook and Tandem briefly pushing above them to 3.75%. Not far behind on 3.71% are Cynergy and GB Bank (via Raisin).

Quite a few others improved their rates too, passing on some of the Bank of England base rate hike in early May. But not all of these are competitive.

Some previous market leaders are still well off the top of the table. Chase boosted to 3.3%, Virgin Money will increase to 3.03% and Zopa moved to 3.46%.

With so many accounts above 3.5%, I’d say that’s my new base for moving cash. If you’re getting less than this, then it’s worth moving it up to one of the top-paying options.

However, these rates can all still be beaten by the Barclays Blue Rewards Rainy Day Saver pays 5.12% on the first £5,000.

Easy access picks as of 1/6/23

A longer list of accounts is available here. The leading options are below:

  • Barclays Blue Rewards (5.12% AER variable): min £1 / max £5,000 (requires current account with Blue Rewards add-on)
  • Chip (3.82% AER variable): min £1 / max £250,000
  • Investec (3.82% AER variable): min £5,000 / max £250,000
  • Ford Money (3.75% AER variable): min £1 / max £2m
  • Shawbrook Bank (3.75% AER variable): min £1,000 / max £85,000
  • Tandem (3.75% AER variable, includes 0.35% bonus for 12 months): min £0 / max £250,000
  • Cynergy Bank (3.71% AER variable includes bonus for one year): £1 / max £1m
  • GB Bank via Raisin (3.7 AER variable): min £1,000 / max £85,000

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

Notice accounts reach 4.31%

Big movement too from last month, with an increase of 0.46% on the four-month notice account compared to the best rates last month.

Once again, one month and one week notice accounts can easily be beaten by easy access so are likely best avoided.

Notice accounts picks as of 1/6/23

  • Cynergy Bank (4.31% AER variable) 120-day notice: min £500 / max £1m
  • Cynergy Bank (4.26% AER variable) 95-day notice: min £500 / max £1m

Monthly savers stay steady at up to 7%

No change on the leading regular saver accounts – though check out my May bank account update for news on freebies and bank switch deals attached to most of those listed below.

Regular Saver accounts picks as of 1/6/23

  • First Direct (7% AER variable) – min £25 / max £300 (requires current account)
  • 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)
  • Halifax (5.5% AER fixed) – min £25 / max £250
  • Bank of Scotland (5.5% AER fixed) – min £25 / max £250 (requires current account)
  • Lloyds (5.25% AER fixed) – min £25 / max £250 (requires current account)

In case you missed previous savings account updates:

Check out my savings updates from previous months for details on the following and more

  • First Direct’s 7% regular saver
  • Green Bonds at 4.2%
  • Chip instant access changes

Fixed rates jump up to 5.35%

A month ago getting 5% on fixed rate savings was exciting. Now we’re already going well past this. It’s likely the banks are pricing in the base rate to go above 5%, so they may not increase again even once those changes happen (if they do).

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.

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 1/6/23

  • Al Rayan via Raisin (4.66% Expected Profit Rate fixed) 6-month fix: min £5,000 / max £85,000
  • Atom (4.85% AER fixed) 9-month fix: min £50 / max £100,000
  • National Bank of Egypt via Raisin (5.25% AER fixed) 12-month fix: min £10,000 / max £85,000
  • Oak North Bank (5.08% AER fixed) 15-month fix: min £1 / max £500,000
  • Oak North Bank (5.09% AER fixed) 18-month fix: min £1 / max £500,000
  • Tandem (5.25% AER fixed) 24-month fix: min £1 / max £2.5m
  • Tandem (5.3%) three-year fix: min £1,000 / max £85,000
  • Hampshire Trust Bank (5.05% AER fixed) four-year fix: min £1 / max £250,000
  • Tandem (5.35% five-year fix: min £50 / max £100,000
  • ISBank via Raisin (5% AER fixed) seven-year fix: min £1,000 / max £85,000

Easy access ISA up to 3.75%

For those of you who need the tax-free earnings offered by ISAs, there’s been improvement on rates again this month.

One change from 1 June 2023 is a hike from 3% to 3.75% on Virgin Money’s loyalty ISA, which is open to those who have a current account with the bank. Just below that is an increase from Cynergy to 3.62%.

The base rate hike is also reflected at the top of some fixed rates accounts, with Castle Trust moving from 4.25% to 4.51% for a one-year fix.

ISA picks as of 1/6/23

  • Virgin Money easy access (3.75% AER variable from 1 June 2023) min £1 Requires current account, transfers in / flexible
  • Cynergy easy access (3.62% AER variable): min £1 Transfers in from certain providers
  • Castle Trust Bank 12 month fix (4.51% AER fixed): min £1,000
  • Santander 18-month fix (4.25% AER fixed): min £500
  • UBL 24 month fix (4.55% AER fixed): min £2,000 Transfers in

Lifetime ISA picks as of 1/6/23

  • Moneybox (3.5% AER, drops to 2.75% after one year): min £1

Where to put your savings in June 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 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 savedAccountRateNotes
£5,000Barclays Blue Rewards Rainy Day Saver5.12%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 above £5,000

Again, going on the idea of keeping things simple, I’d next look at an easy access account without any restrictions.

Amount savedAccountRateNotes
Up to £85,000Chip3.82%

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 Club Lloyds Monthly Saver over the higher paying First Direct account one as you can pay in more each month, plus you get free cinema tickets or Disney+ on top.

Amount savedAccountRateNotes
Up to £400 a monthClub Lloyds Monthly Saver6.25%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 savedAccountRateNotes
Up to £20,000 (more if transferred)Castle Trust 1 year fixed ISA4.51%

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 the best rates. The best rate is actually in an ISA right now, so I’ve given a non-ISA option too.

Amount savedAccountRateNotes
Up to £20,000Principality Building Society easy access ISA3.57%
Up to £1mFamily Building Society easy access3.55%

Andy’s podcast

Listen to Cash Chats, Andy’s award-winning podcast. Episodes every Tuesday.

Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.