If you want to get the best interest rate on your savings, these are the accounts you need.
To help you make the most on savings, every day we update our best buy list of the top paying accounts for your money
And every month I share an update article and video, taking you through the latest news and rate changes.
But to keep things simple, in this article I’ve broken down what I think are the best options for your cash. You could stick to just one or two, or build up a portfolio with a handful more.
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How much do you need in savings?
Before we get started, it’s worth talking about what you actually need in savings.
Broadly we should all aim to have enough to cover three to six months of essential spending, though I think those with irregular income could do with topping it up further. This is your emergency fund, which at least some of it needs to be in an easy access account (you could consider notice accounts for part of it).
And on top of this you’ll want the money for your spending and saving goals. Whether that’s building up a pot to buy a new phone or pay for your holiday, to longer term and more expensive purchases like your first home or a wedding. You might hear this referred to as ‘sinking funds’.
So tot up what you’ll need, and then above this it’s generally better off thinking long term. Though there are fixed rate bonds that range from less than a year to four or five years, an extra cash you don’t need is often better off being put towards your pension, adding to investments or to overpay your mortgage.
Watch out for rate cuts
Unless a rate is labelled as fixed, then it will either be a variable rate or a tracker rate account (or a mix). This means once you open the account the interest rate you earn could change, and with a handful of base rate cuts expected in 2025, that’s very likely to happen.
So the account you choose now, might not be the best one later in the year. so keep an eye on our savings updates so you be sure you’re getting the best rates.
Account 1: an easy access account
The first option is one which doesn’t restrict you from getting hold of your cash. Ideally you want this to not only be separate to your main current account, but also paying the best possible rate of interest out there.
Notice accounts could also be worth a look for something you know you’ll need to shell out for on a set date in the future.
Winner: Santander Edge Saver
| Rate: | 6% AER variable (including 1.5% bonus for one year) |
| Min: | £1 |
| Max: | £4,000 |
| Notes | £3 a month in required Santander Edge current account (though this can be avoided or should be cancelled out by cashback on bills) |
| What you’ll earn: | Up to £240 (based on a £4,000 balance) |
This account is head and shoulders above any other easy access account when it comes to the rate available – but it comes with a few catches.
Primarily, there’s the cap of £4,000 that will count towards interest, which means you won’t earn anything above this amount. Though for most people that’s more than enough, some will still need another account.
However, there is a work around if you’re a couple as you can open up two individual Edge Savers and two joint Edge Savers, meaning you can get £16,000 saved.
Another issue is that to get it you need to have the Santander Edge current account, and that has a £3 monthly fee which will eat into your interest earned. You also need to have two direct debits and pay in £500 every month.
However, there are two ways to stop this reducing what you actually receive. First, the current account also pays cashback on bills. This adds more than enough to cover the fee.
Alternatively you can avoid the fee completely as long as you don’t ever set up the two direct debits on the account. This is particularly handy if already earn cashback on bills, don’t pay any bills or if you’re hoping to open up two personal and one joint Saver as a couple. Technically Santander could force you to change accounts if you don’t set up the direct debits, but I’ve not heard of any instances.
Finally, the rate is only going to be a top option for one year. After 12 months the rate will drop by 1.5% (though since it’s variable it could drop more).
Despite all this, if you want to get the most interest on a lump sum and still have access to your cash, this is the best bet.
Runner Up: Trading 212 Cash ISA
| Rate: | 4.9% AER variable (easy access) |
| Min: | £1 |
| Max: | £20,000 a year |
| Notes: | Flexible |
| What you’ll earn: | £245 (based on a £5,000 balance) |
The 4.9% on offer from this ISA beats most other easy access accounts right now, let alone for those looking to avoid tax on interest!
Top alternatives:
As good as the Santander Edge Saver sounds, those hoops could well put you off! Or you might have more than £4,000 you want to save.
And the Trading 212 ISA might not be suitable if you’re using your annual allowance for investing instead,
In either case, you can see the top list of other options in our Best Buys tables.
Account 2: for your new savings each month
If want to add to your savings from your salary each month then a regular or monthly saver is your best bet. Not only will you get some of the highest rates, but you’ll need to put money aside each month – helping you get into a savings habit. Just watch out for restrictions like when you can access your money.
There are quite a few options, though these are my top two.
Winner: First Direct Regular Saver
| Rate: | 7% AER fixed |
| Min: | £25 a month |
| Max: | £300 a month |
| Notes: | No withdrawals Requires a current account |
| What you’ll earn: | £135 (based on £300 added each month) |
You need to have a First Direct current account to access this account, but with up to £175 on offer for switching your bank, that feels like a no-brainer.
A big plus is that the rate is fixed for a year so if rates fall you won’t see any drop (though you’ll miss out on any increase, but that’s unlikely this year).
However, you won’t be able to withdraw any money from this account within that year without the whole account closing and forfeiting the interest.
Runner Up: Natwest Digital Saver
| Rate: | 6.17% AER variable |
| Min: | £1 a month |
| Max: | £150 a month |
| Notes: | Easy access Requires a current account |
| What you’ll earn: | £60 in first year (based on £150 added each month) |
My next pick doesn’t let you save as much each month and it isn’t a fixed rate account, but it has two benefits worth taking notice of. First, it’s easy access, so you can withdraw money whenever you want.
But more important is that this account doesn’t reset after 12 months like most other regular savers. Instead it’ll keep going, with the only limit being interest is only paid on balances of up to £5,000. So while it’ll take you a couple of years to reach that total, it’ll keep on earning you the rate even once you stop adding new cash.
You can only have one per customer and must have a current account to access it, but you could get another via Natwest’s sister bank RBS.
The best monthly savings accounts
Check out our list of the highest paying regular or monthly savings accounts.
Account 3: for locking money away
If you have enough for emergencies in easy access but want to keep some money available in the medium term, then a fixed rate bond is worth a look. You’ll lock in a fixed rate for a set time meaning you can avoid potential cuts elsewhere.
I’m less concerned here about the provider here, and the rate should be your main focus. Once the account matures, then move it to another account. Check out best buy tables for the best paying options.
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Account 4: for higher and additional rate tax payers
If you’re going to go over your personal savings allowance, or don’t get one at all as an additional rate tax payer, there are better places for your cash.
Winner: Cash ISAs
You can add £20,000 in to a Cash ISA each year and all the interest is tax-free. Some will also allow you to transfer in balances from other ISAs above that limit.
Though bear in mind that annual allowance is shared across all ISAs, so you might be better off using this type of account for investments.
Runner Up: Premium Bonds
| Rate: | 4% Prize Rate |
| Min: | £25 |
| Max: | £50,000 |
| Notes: | Flexible |
| What you’ll earn: | It’s all down to luck! |
Premium Bonds are best avoided if you’ve not used your PSA or ISA allowances. But if you have, especially anyone who’s a 45% rate taxpayer, then Premium Bonds are worth a look as all the winnings are tax free.
But despite the prize rate sitting at 4%, it doesn’t mean you’ll get that return. In fact, the lower your balance, the higher the chance that you’ll win nothing at all!
However, the more you have saved, the more chances you have to win, and the more likely you’ll get prizes approaching the rate. Here’s our full guide to how Premium Bonds work.
Editor’s pick: 5.1% savings
Easy access ISA from Trading 212 paying 5.1%
Thanks for this comprehensive overview of savings accounts. It would be really helpful if you could also include information about Shariah-compliant savings accounts and financial products in future articles. Many Muslims need alternatives to interest-bearing accounts, and options like profit-sharing accounts from Islamic banks might be relevant not just for Muslims but also for others interested in ethical banking alternatives.
from this bank:
NEW easy access
https://www.gatehousebank.com/personal/savings
My Moneybox Cash ISA is currently paying 4.92% with 3 withdrawals allowed before the interest rate is affected.
That’s a short term temporary promotion but not available for current users.
The exclusive rate offered by Metro has dropped to 4.51%. I opened the account whilst the 5.22% was advertised (shows 5.10% in app), is this going to drop soon and I should look into moving the funds already having only had it for a month? Thanks
Andy,
Regarding your #1 easy access account (Santander Edge Saver) could you simply close the account after the 12 months and then open a new one, thereby retaining the higher rate?
Thanks for sharing this informative post on savings accounts. I found it very useful to learn about the various options available and their interest rates. This information will definitely help me make a more informed decision on where to park my savings. Keep up the great work!
Am with virgin m plus account and savings plus account with £25000 in am I better moving my money elsewhere to earn more money thanks
Hi Andy,
I note that for the Coventry B/S Online Limited Access account you say that the maximum amount which can be withdrawn per withdrawal is up to 10% of the balance. Could you please advise where this is stated in the Coventry documentation as I am in the process of getting an account up and running and have not been able to find any restriction info. in the docs they have sent me.
Also this has proved to be the most extended time to open an account I have ever experienced, and I have opened many in my time, and I think this is due to their using two lots of post to provide, firstly an account number, and then a code after you start to log on to the account.
This is supposed to be an online account so using postal communication as well seems rather strange.
Tks
Brian