October’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.

October’s savings update video

October’s savings news

Get 2% interest from money coaching app Claro

There’s a new best buy for savings – though as with the other highest paying accounts there are restrictions on how much money will earn the rate. It’s via a just launched fintech app called Claro (iOS only at the moment). This normally comes with a subscription fee, but to tempt customers in this has been ditched for 12 months.

The interest rate is a variable 2% on up to £3,000. It’s calculated daily but paid quarterly as a “reward”. There’s a minimum £100 deposit. I’m not sure if you’ll earn compound interest, though if you start with £3,000 that’s not an issue as there’s no interest paid above that amount!

Opening the app and applying for the account took about five minutes. Though it’s marketed as a savings account, I had to open up a general investment account, and this required me to upload a copy of my photo ID. However, your money is kept in cash so there’s no risk your deposit will fall in value.

The money will actually be held in a Natwest account which means it’s fully protected up to £85,000 by the FCSC (though that total includes other cash you might hold with Natwest or RBS).

When I deposited £500 to test the account out it didn’t appear in the app until the next day. Withdrawals can take up to 48 hours – worth bearing in mind if you need the money fast.

Of course, this offer is just to tempt new customers to Claro’s app – which is more than just a savings account. The idea behind it is you can access financial coaches and analyse the spending of your linked current accounts. There’s obviously also the option to invest via the app. I’ve not had a chance to look at these, so I can’t say if it’s a good or bad service.

Earn 5% on round-ups with Chase

At first sight, this sounds fantastic. You can’t get 5% interest anywhere right now. But in reality you won’t make much from this promotion from the new digital bank Chase.

You’ll only get the interest on money saved via a feature called “round-ups”. This is where your spending using the Chase debit card is rounded up to the nearest pound, and that spare change is moved to a separate savings pot.

So for example, if you spend £1.80, the extra 20p will go into your savings. Unless you deliberately go out and make lots of 1p transactions, it’s going to take a long time to build up any sizeable amounts in this pot. The offer is also only running for 12 months from when you start the account.

Say you use your card 30 times a month, you’re looking at just under £30 a month going into the pot at best. In reality, it’ll be much less. I doubt it’s even worth a tenner a year to most people.

You can check out my full review of Chase Bank’s new current account, including how to get 1% cashback on transactions.

Read more from Andy on savings

Marcus increases existing account holder rate

Anyone with a Marcus savings account (or Saga for that matter) will now be getting an extra 0.1% interest on the easy access account. This means you’ll get a decent 0.6% (decent when compared to other accounts) though not the best.

If you haven’t already activated another 0.1% then you’ll also need to do this to get the rate. I showed how to do this in my July savings news video.

Premium Bonds prize checker app

If you hold Premium Bonds then it’s worth trying out the relatively new app from NS&I to check your winnings each month. It’s free to download and you just need your Premium Bond number to log in and see if you’ve won in the latest draw, when the next draw will be and prize history over the last six months.

Where to put your savings in October 2021

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 £3,000

Amount savedAccountRateNotes
£1,000 to £3,000Claro app2%Only via Claro app

Best places to save £3,001 to £9,000

This combination gets you the highest interest rates and some extra freebies.

Amount savedAccountRateNotes
£1,000Virgin Money M Plus current account2.02%Can only earn interest on the first £1,000 saved
£3,000Claro app2%Only via Claro app
Up to £5,000Club Lloyds current account0.6% to 1.5%Two direct debits are required to get the interest on balances up to £5,000

You’ll also get a choice of free cinema tickets or movie rentals.

£100 bank switching bonus until 19 October 2021

Best place to save £10,000

As long as you can lock the money away for at least six months then the bonus from Raisin is worth grabbing.

Amount savedAccountRateNotes
£10,000Investec via Raisin 32 days notice0.8%If you’re new to Raisin and put in £10,000 for at least six months you’ll get a £50 bonus on top

Best places to save between £10,001 and £19,000

For larger sums, I’d put £10k in Investec to get the Raisin bonus then get those better paying easy access accounts. For the next £5,000 beyond this you can look at that Club Lloyds account again.

Amount savedAccountRateNotes
£10,000Investec via Raisin 32 days notice0.8%If you’re new to Raisin and put in £10,000 for at least six months you’ll get a £50 bonus on top
Up to £3,000Claro app2%Only via Claro app
£1,000Virgin Money M Plus current account2.02%Can only earn interest on the first £1,000 saved
Up to £5,000Club Lloyds current account0.6% to 1.5%Two direct debits are required to get the interest on balances up to £5,000

You’ll also get a choice of free cinema tickets or movie rentals.

£100 bank switching bonus until 19 October 2021

Best places to save more than £19,000

Finally for up to £64,000 in savings I’d swap the Club Lloyds account for Premium Bonds.

Amount savedAccountRateNotes
£10,000Investec via Raisin 32 days notice0.8%If you’re new to Raisin and put in £10,000 for at least six months you’ll get a £50 bonus on top
Up to £3,000Claro app2%Only via Claro app
£1,000Virgin Money M Plus current account2.02%Can only earn interest on the first £1,000 saved
Between £5,000 and £50,000Premium bonds1%*Once you have £5,000 in Premium Bonds it should win more than the best easy-access account (currently 0.65%)

Once you’ve got at least £10,000 in Premium Bonds your average win rate will probably be better than the Club Lloyds account
* prize rate, not interest rate

Andy’s podcast

Listen to Cash Chats, Andy’s twice-weekly podcast. Episodes every Tuesday and Friday.

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