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, I regularly update my best buy list of the top paying accounts for your money.
But it’s not always as easy as putting all your cash in a single account. If you have more than a few grand then right now the top easy-access account would give you a rate of just 0.71%.
To beat this you’ll need to split your money across more than one account. Do this and it’s possible to get higher rates.
To keep things simple, in this article I’ve broken down the best options for your cash. You could stick to just one or two, or build up a portfolio with a handful more.
You can watch this video, or keep reading to learn more.
Best accounts for easy-access cash
It’s important you have some money available to you that’s relatively easy to access and earns the best interest you can. Though these accounts limit how much money will be eligible for interest, that shouldn’t be a problem.
If you combine all three of them you’ll be able to put away £9,000 – more than enough for most emergency saving pots.
Winner: Virgin Money Current Account
- Interest rate: 2.02% AER
- Limit: Only earned on first £1,000 per account
- Max you’ll earn: £20.20
This is the first account I’d open for your savings as it’s the highest paying at 2.02%. The rate is variable so it could change.
It’s a current account which means it’s easy access with no restrictions on withdrawals. However there is a limit on how much you can earn interest on – £1,000. That means the maximum you’ll earn in £20.20 in a year.
You are able to open more than one of these accounts, and some readers have told me they’ve got more than a dozen, though I’ve also been told some have only been allowed to open two. Personally I’d prioritise opening reward or cashback current accounts which will earn you more money. But if you’ve got them already then it’s worth giving this a go.
Don’t forget that if you switch into the account you can get 12 free bottles of Virgin Wine. Here’s more on this offer and my review of the account.
Runner up: Claro
- Interest rate: 2% AER
- Limit: Only earned on first £3,000 per account
- Max you’ll earn: £60
The app Claro is my runner-up as it’s only available on iOS – but is a slightly better option for anyone who has an Apple iPhone.
It offers 2% AER (variable) on a balance of up to £3,000 – so you’ll get the same interest (more or less) as you’d have with three Virgin accounts.
It’s currently free, though bear in mind if this changes you’ll most likely want to withdraw your cash to a different account. More details here.
Runner up: Club Lloyds current account
- Interest rate: 0.6% going up to 1.5% (effectively 0.78%)
- Limit: Only earned on first £5,000
- Max you’ll earn: £39
A third option after Claro and Virgin is another current account. This will give you 0.6% on the first £4,000 saved, and then 1.5% on the next £1,000. You earn no interest on money over that £5k.
For those with under £4,000, that 0.6% can be beaten in other easy-access accounts, but I’ve put this account above those as you will also get some freebies! Every year you get to choose between six cinema tickets, 12 movie rentals or an annual magazine subscription. This is worth £40 to £60.
Plus if you have the full £5,000 balance saved for a year, you’ll earn a much better 1.5% on the last grand. When you combine the two rates that’s effectively 0.78% and you’ll make £39 in interest.
There are a couple of requirements for this to work, but they’re easy to meet. First, you need to have two direct debits on the account to get the interest. Here’s my guide to finding extra direct debits.
Second, you need to pay in £1,500 a month to avoid a monthly £3 fee. But that cash doesn’t have to be in one go or stay in the account, so you can use it for bills, spending or just transfer it out to another account. Here’s my full review of the Club Lloyds account.
Best account for ongoing savings
If you’ve already used up the allowances in the Virgin and Claro accounts and want to keep saving more each month then this is my top pick.
Though the rate on offer is lower than the 3.04% available via Natwest and RBS, you can save more than four times as much each month, so it’s more worth the effort.
Winner: Nationwide Flex Regular Saver
- Interest rate: 2% AER (variable) for 12 months
- Limit: Up to £200 a month
- Max you’ll earn: £25
The idea of a regular saver is you put money aside each month for a year, then get the interest in one go. So you can move the money the day after pay day to ensure you’re always saving.
You need to have a Nationwide current account to access this account, but with up to £125 on offer for switching your bank, that feels like a no-brainer (most of you should go for the Flex Account account).
You can make up to three withdrawals from the account and still get the 2% rate. If you put the full amount in each month you’ll make £25 in interest.
Is it worth having multiple accounts?
You might be thinking, this feels like too much hassle – I just want one savings account to keep things easy. Well, let’s have a look at the difference in earnings.
If you’ve used each of these accounts to the max, you’ll have the following in savings and interest:
|Account||Savings Balance over 12 months||Interest after 12 months|
|Virgin Money Current Account||£1,000||£20.20|
|Claro (or three more Virgin Money Accounts)||£3,000||£60|
|Club Lloyds Current Account||£5,000||£39|
|Nationwide Flex Regular Saver||£2,400||£25|
That’s a total interest of £144.20 on £11,400 put aside. That’s the equivalent of just under 1.27%.
The same amount in the top-easy access account (paying 0.71%) would earn you £72.22 (£63 for the lump sum and £9.22 from the monthly deposits). So these four accounts are worth an extra £71.98 – almost double.
Of course, you might still want an easier life, so I’ve shared details of my top option below. And if you want to put more aside, I’ve also written about accounts for larger sized savings pots.
And don’t forget rates can and will change, so it’s worth keeping an eye on the best rates right now in my regularly updated list.
Best if you want only one savings account
Too much effort to open up more than one account? Well, if you want just a single account you’re going to sacrifice the interest rate you can earn. But it’s still worth shopping around for the best possible rate.
- Interest rate: 0.7% + £20 welcome bonnus
- Limit: Up to £85,000
Though at the time of recording the highest paying easy-access account is 0.71%, new users of the app Chip will beat this as there’s a £20 welcome bonus on top of a slightly lower 0.7%.
If you saved the same £9,000 upfront, followed by £200 a month into this account, with the addition of the £20 bonus, it’ll be worth £92.09 over 12 months.
Plus from mid-January 2022, the ‘AI’ auto-savings feature with Chip will be free to all users – a handy way to add more to your savings without any effort.
New Chip users need to use the code CLEVER20 to earn the £20 bonus when they sign up and save at least £1 (see all the terms and conditions here).
Best account for larger sums
For most of us, we don’t really need to save more than three to six months in cash savings. Assuming monthly regular expenses of around £2,000, the accounts above are more or less enough to cover six months in case of emergency (albeit sacrificing interest if you have to withdraw from the regular saver early).
Beyond this it might be worth looking at investing, overpaying your mortgage or adding to your pension.
But if you are saving for something beyond an emergency, or want a bigger emergency fund then where do you put that cash? I’ve shared below a couple of options.
Winner: Premium Bonds
- Interest rate: 1% prize rate (no guarantee of winning)
- Limit: £50,000
If you have at least £5,000 more to save then I’d consider Premium Bonds. There isn’t an interest rate on this, instead there’s a 1% chance of winning. However, since the minimum prize is £25 and the maximum prize is £1 million, it’s impossible for every £100 saved to earn £1. In fact, there’s no guarantee you’ll win any prizes at all!
But with the average rate of luck, those with at least £5,000 should pick up a couple of £25 prizes, which would be 1%. Even if you only win once, the rate of 0.5% isn’t too far off what’s on offer elsewhere – though as easy-access rates improve you might want to reconsider.
The more you have saved, the more chances you have to win, and the more likely you’ll get prizes approaching 1%. Here’s my full guide to how Premium Bonds work.
Runner up: Investec 32-day notice via Raisin
- Interest rate: 0.8% AER (Variable) + £50 bonus
- Limit: £85,000
For those with £10,000 to save which you’d be happy to lock away for six months, then this account is worth a look.
The Investec 32-day notice account locks money away for just over a month and pays 0.8% AER, but open it via Raisin and you’ll get a £50 bonus on top.
I wouldn’t save more than £10k here – you’re really after the bonus. If you do this for the six months you’ll earn £90.
After six months you could withdraw the cash and put it elsewhere – perhaps Premium Bonds! Here’s more on how the bonus works.