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.
May’s savings update video
May’s savings news
Inflation down – but not by much
Inflation finally fell – but only from 10.4% to 10.1%. We’ll find the latest Bank of England predictions, along with news of whether base rate will change from 4.25% next Thursday.
It’s expected that we will see a jump to 4.5%, and that’s being reflected already in some of the changes to savings rates detailed below. I’ll update you as ever on the blog and YouTube once they’ve made the announcement.
Easy Access rates jump up to 3.71%
At the start of last month the top easy access account was 3.4%. It’s now a huge 3.71%, with another 10 accounts offering 3.4% or more.
Chip is still top of the table, once again responding to a hike from a competitor (Shawbrook in this case increasing to 3.65%) just before the May bank holiday weekend.
Below this are My Community Finance, offering 3.56% on balances over £20,000, Investec at 3.51% and Tandem at 3.5%. You can see the other top payers in the list below.
One that’s slightly lower but worth sharing is the Leeds Building Society 3.3% paying account. Not only is it a building society (which is a good ethical shortcut), the rate is locked for 12 months. So if you’re worried about rates falling it could be a good pick. And if they go up elsewhere, you can still move your money as you’re not locked in.
Also a reminder to check if your provider has increased their rate that you’re getting it. Marcus, for example, requires you to add a bonus within the app.
With so many accounts above 3.3%, 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.
Though if your existing savings account is there or thereabouts you might want to hold off a week or so. I wouldn’t be surprised if we see more movement in that time before or after the Bank of England meeting on 11 May.
The likes of Zopa, Cynergy, Kroo and Al Rayan have all been very competitive recently so they may want to be back near the top of the tables. Chase too might want to give its rate a nudge.
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 3/5/23
A full 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 (3.71% AER variable): min £1 / max £250,000
- Up to £50 bonus available for new account holders if you save for six months (details at bottom of page)
- Shawbrook Bank (3.65% AER variable): min £1,000 / max £85,000
- My Community Finance (3.56% AER variable on balances above £20,000 / 2.56% AER between £1,000 and £19,999): min £1 / max £85,000) Limited applications available
- Investec (3.51% AER variable): min £5,000 / max £250,000
- Tandem (3.5% AER variable, includes 0.35% bonus for 12 months): min £0 / max £250,000
- Secure Trust Bank (3.5% AER variable): min £1,000 / max £85,000
- Charter Savings Bank (3.45% AER variable): min £5,000 / max £1m
- UBL via Raisin (3.41% AER variable): min £1,000 / max £85,000
- Aldermore (3.4% AER variable): min £1,000 / max £1m
- Family Building Society (3.4% AER variable): min £100 / max £250,000
- GB Bank via Raisin (3.4 AER variable): min £1,000 / max £85,000
- Leeds Building Society Limited issue online access (3.3% AER fixed until 2 June 2024): min £1,000 / max £1m
As ever, these could well change again in the coming days, so check out my best buys guide for updates.
Limited access accounts nudge up to 3.6%
For the first time in a while there are higher paying rates on easy access accounts than the ones with limited access.However a couple of increases worth sharing are Aldermore to 3.55% and HSBC’s Online Bonus to 3.5%.
Limited access picks as of 3/5/23
The top accounts this month include:
- Yorkshire Building Society Rainy Day account (3.6% AER on first £5,000 / 3.1% on balances over £5,000): min £1 / max £500,000
- Max two withdrawals a year
- Aldermore double access (3.55% AER variable): min £1,000 / max £1m
- Max two withdrawals a year
- HSBC Online bonus (3.5% AER variable): min £1 / max £10,000
- rate reduces to 2% in months you make a withdrawal
- requires a current or other savings account with HSBC
Notice accounts reach 3.95%
Big movement too from last month, with an increase of 0.3% on the three month and four month notice accounts compared to the best rates last month.
However one month and one week notice accounts can easily be beaten by easy access – we’ll need Zopa to make a move for these to increase.
Notice accounts picks as of 3/5/23
- DF Capital (3.95% AER variable) 120-day notice: min £1,000 / max £250,000
- DF Capital (3.9% AER variable) 90-day notice: min £1,000 / max £250,000
- Zopa (3.45% AER variable) 31-days notice: min £1 / max £85,000
- Zopa (3.38% AER variable) 7-days notice: min £1 / max £85,000
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 3/5/23
- 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)
Fixed rates jump up to 5%
A massive jump on fixed rates across the board has just happened with ISBank offering 5% on one to seven-year fixes via Raisin. Yes, seven years! There’s also 4.75% on a nine-month fix.
I don’t know how long they’ll last, or if other banks will respond, so it’s well worth a look. BTW, Raisin is a market place for savings, so you open an account with them, and then apply for the savings account itself.
But even before this there had been big jumps in recent weeks. Compare the top of the table 4.51% one year fix at the start of April to the five banks currently offering between 4.8% and 4.85%.
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 3/5/23
- Atom (4.2% AER fixed) 6-month: min £50 / max £100,000
- ISBank via Raisin (4.75% AER fixed) 9-month: min £1,000 / max £85,000
- ISBank via Raisin (5% AER fixed) 12-month: min £1,000 / max £85,000
- My Community Finance (4.87% AER fixed) 18-month : min £1,000 / max £85,000
- ISBank via Raisin (5% AER fixed) 24-month : min £1,000 / max £85,000
Best places for your new ISA allowance
There’s a new ISA season in play, meaning you’ll be able to add up to another £20,000 this financial year – though only if you need to.
It’s also a good opportunity to move money from old accounts for better rates – make sure the new account accepts transfers in.
Rates have improved compared to the end of the April, but they haven’t pushed up as much as the non-ISA equivalents. It’s worth noting that if you want a big name you’ll have competitive rates with Natwest, Virgin, Nationwide and others all in the mix.
It’s worth looking at a couple of offers to see if they beat higher rates. Santander is still offering £50 if you transfer at least £10,000 across to one of its fixed cash ISAs.
Elsewhere, ending on 3 May 2023 – so you’ll likely miss it – is a £100 bonus for opening a Limited Access ISA from Coventry Building Society via Hargreaves Landsown and adding £10,000 by debit card. That last point is important to check as some providers might have a daily payment limit lower than this.
ISA picks as of 3/5/23
- Yorkshire Building Society Loyalty Six Access ISA (4.25% AER variable on up to £20,000, then 3.75%) easy access: min £1
- Shawbrook (3.45% AER variable) easy access: min £1,000
- Castle Trust Bank (4.25% AER fixed) 12 month fix: min £1,000
- Santander 18-month fix (4.25% AER fixed): min £500
- Newcastle Building Society (4.4% AER fixed) 24 month fix
Lifetime ISA picks as of 3/5/23
- Moneybox (3.5% AER, drops to 2.75% after one year): min £1
Chip Prize draw improves
There are more prizes on offer via the Chip Prize Saver account. For the May draw there are double the number of prizes:
- 1 grand prize of £10,000
- 50 prizes of £100 each
- 100 prizes of £50 each
- 500 prizes of £25 each
- 2,000 prizes of £10 each
I’m still not fussed, but the prizes are tax-free so you might want to consider it alongside Premium Bonds if you’ve already gone over your PSA. Here’s my full review.
Where to put your savings in May 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.
|£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 above £5,000
Again, going on the idea of keeping things simple, I’d next look at an easy access account without any restrictions.
|Up to £85,000||Chip||3.71%|
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.
|Up to £400 a month||Club Lloyds Monthly Saver||6.25%||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.
|Up to £20,000 (more if transferred)||Santander 1 year fixed ISA||4.15% + £50 bonus if you transfer £10,000|
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
|Up to £250,000||Family Building Society easy access||3.4%|
Listen to Cash Chats, Andy’s award-winning podcast. Episodes every Tuesday.