September 2022’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.

September’s savings update video

September’s savings news

Inflation reaches 10.1%

Once again even if you get the highest interest rate your savings are still losing out compared to inflation. The latest figures show inflation has hit 10.1% – the highest rate in 40 years.

Though it’s just a smidgen more than last month’s rate (10.1%), it still means prices are more than they were a year ago. And it’s likely to get worse. Goldman Sachs are predicting it could reach 20% in early 2023.

Best buy easy access account now 2.1%

There’s been a massive hike (comparatively) on easy access savings in the last week. First Gatehouse went to 2%, then Al Rayan responded by upping their rate to 2.1%.

These are both Sharia-compliant banks, so you don’t get “interest”. Instead you get an expected profit. Though it’s technically not guaranteed, I think there’s very little chance, if any, of you not getting the full amount.

Compared to my update a month ago, that’s an increase of 0.39% at the top of the table. But we’re still to see any movement from Chase (at 1.5%) and Virgin Money (still at 1.71%).

One-year fix at 3.5%

*Update 7 September – This rate has been pulled. The next best is 3.35%, though as always rates change regularly so check out my best buy tables *

Another big jump compared to last month is in one-year fixes. You can now get 3.5%, a massive 0.74% higher than rates at the start of August. This is from Ahli United Bank via Raisin. There’s also a boosted £30 bonus available from Raisin if you’re a new customer.

ISAs hit 1.75%

You can get 1.75% from Virgin Money and Gatehouse for a Cash ISA, meaning for the first time in a long time ISAs are actually competitive.

However, they can still be beaten and you probably don’t need to worry too much about the tax-free interest you get with ISAs unless you have large amounts of cash saved or are a higher-rate taxpayer. I wrote more about tax and savings with rising rates here.

Nationwide and Natwest Regular savers improve

We’re also seeing improvements from some of the big regular savers. Nationwide has upped the rate on FlexRegular and Start to Save accounts to 3%. And later this month, the Natwest and RBS Digital Regular savers will increase to 3.8%.

Chip fees to change again

On 12 October, it’ll stop being free to use the auto-saving feature on Chip. A new 45p charge will be added on each save. To put this in context, if you moved £22.50, this would the equivalent of 2%. So move less and it’d be a higher rate, and move more and it’d be lower.

There will also be a limit of just two free withdrawals a calendar month. After this it’s £1 per withdrawal. And if you use recurring saves such as the Payday Put Away feature (essentially just a standing order to move money) they will cost 25p each time.

Sadly I think this means there’s no point using this feature with Chip. At the moment it’s still free with Plum, so you’re better checking that out instead.

There’s also a new prize draw savings account which I’ll write more about later in the month.

Chase Roundup accounts close after 12 months

If you opened a Chase Bank account in September last year and activated the round-up feature straight away, then the money you’ve saved in that pot, earning a great 5%, will be moved to your main account on the one-year anniversary.

So there are two things you’ll need to do. One is to move that money again into an account earning interest, unless you need to spend it.

Second, though Chase says the Round-Up accounts reset, I don’t know if this means you need to reactivate the roundup bonus to keep earning it again for the next year. We won’t know until the first customers have completed a year, so it’s worth keeping an eye out.

Chase withdrawal restrictions

There’s also no news yet from Chase as to whether the bank will increase rates on the easy-access accounts. The once top-of-the-table 1.5% is now way behind the rest.

The difference in rates has meant lots of people are moving elsewhere, but when doing so they’ve been faced with a significant problem. The most you can withdraw in a day is £25,000. Now, most people won’t be impacted by this, but it does

Green Bond increase still not worth it

A new issue of 3-year Green Bonds from NS&I pays 3%, a massive improvement on the previous 1.3%. But they still aren’t competitive when you look at rates elsewhere.

Even if you’re willing to take a hit on the rate you get an ethical account, you can get 3.3% from Tandem for just a one-year fix. So you earn more and have the flexibility to move money in 12 months if there are better rates.

Also, it’s worth noting the new Green Bond rate is just for new accounts. Existing bonds will remain at their lower rate.

Cynergy & Tesco customers need to take action for better rates

Cynergy Bank is often near the top of the best buy tables, but it has one major drawback. When rates improve, they only apply to new accounts. And if you’re in an easy-access account, you’ll need to open the new account and then transfer your money across.

I did this for my Cash ISA, and it was very simple, taking maybe 5 minutes from the admin side of things, though it took a few days for the money to move.

Similarly, if you have money with Tesco Bank, you’ll need to check if you’re getting the recently improved rates. If not, follow the same process and open new accounts to transfer cash across. Or just look to see if you can get a better rate at a different bank (you can at the time of writing).

Where to put your savings in September 2022

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 £1,000 to £2,500

The best option for the first £1,500 is the Nationwide FlexDirect current account – if you are eligible. Alongside or instead of this is the Virgin Money M Plus current account.

Amount savedAccountRateNotes
£1,500Nationwide FlexDirect5%Can only earn interest on the first £1,500 saved (additional joint account is allowed) and only for one year. Plus you can only get this account once, so if you’ve had it before you won’t be eligible.
£1,000Virgin Money M Plus current account2.02%Can only earn interest on the first £1,000 saved (additional joint account is allowed)

Best places to save more than £1,000 / £2,500

So you’ve filled up Virgin and possibly Nationwide too? The highest place for the rest is the linked Virgin Money, though I’ve shared some alternatives if you have more than an extra £25,000 (Virgin), don’t want to wait for Chase, or don’t want that account.

Amount savedAccountRateNotes
Up to £100,000Al Rayan2.1%Sharia account / Online only / min £5,000
Up to £85,000Zopa1.81%Can start with £1 / boost to 1.85% with 7-days notice
Up to £20,000Virgin Money Cash ISA1.75%Requires current account

Best places for ongoing savings

If you are saving money every month then these accounts will beat the above accounts. Read more on regular savers here.

Max amount saved per monthAccountRateNotes
£300First Direct Regular Saver3.5%This lasts for 12 months and then closes. Current account required.
£150Natwest Digital Regular Saver3.3%Current account required. You can save up to £1,000 and get 3.3% 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
£150RBS Digital Regular Saver3.3%You can have both the RBS and Natwest accounts, though you’ll need a current account with both
£200Nationwide Flex Regular Saver3%This lasts for 12 months and then closes. Current account required.

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 fixAccountRateNotes
Six monthsHampshire Trust Bank 2.31%
Six monthsFCMB via Raisin2.1%New users might be eligible for a £25 bonus
12 monthsAhli United via Raisin3.5%New users might be eligible for a £30 bonus
12 monthsMy Community Bank3.31%Credit union
12 monthsTandem3.3%Potential ethical option

Andy’s podcast

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

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