Top three savings accounts for 2021

If you want to get the best interest rate on your savings, these are the three accounts you need.

To help you make the most on savings, I’m regularly updating the best paying accounts for your money.

But it’s not always as simple as putting all your cash in the account paying the highest interest. Right now, doing that for easy-access cash would give you a rate of just 0.55%.

It’s possible to get rates higher than this – but the interest is often earned on a limited balance, so that could mean you’re splitting your cash across multiple accounts.

And other high paying accounts are designed to be added to every month, adding more to your portfolio of accounts. Or they could be fixed, limiting your access to the cash.

To keep things simple, I think there are three different accounts you can open which should be more than enough for most people.

It means you’ll only need a maximum of three apps to manage. And of course with these three accounts you’ll get the best rates out there.

You can watch this video, or keep reading to learn more.

Account 1: Virgin Money Current Account

• Interest rate: 2.02%
• Limit: Only earned on first £1,000
• 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.

When opening the account you’ll also get an easy-access savings account paying 0.5%, which is handy for any surplus once you’ve worked through the next couple of options.

Don’t forget that if you switch into the account you can get £180 worth of free Virgin Wine. Here’s more on this offer and my review of the account.

Account 2: Chip +1

• Interest rate: 1.25%
• Limit: Only free on first £2,000
• Max you’ll earn: £25

If you’ve got more than a grand, then it’s worth looking at a Chip+1 account. You can earn 1.25% on up to £5,000 stored in this account.

To get the account you need to download the Chip app and enter a VIP invite code. You can use BCLEVER21 to get access.

However, I’d only put £2,000 in here (at least at this stage). This is because there are now two tiers of Chip. A free option and a monthly paid option.

The free “ChipLite” plan limits you to earning interest on the first £2,000 in the Chip+1 account. If you go for this option you’ll make £25 a year.

You can earn the full 1.25% on an increased £5,000 with “Chip AI”, but it costs you £1.50 every 28 days.

When you take into account this £19.50 annual charge, it drastically cuts the value of your return and makes it a very different interest rate in reality.

This table treats any cash saved above the free threshold as a separate pot, showing you what you’d really earn if you deposited more and paid for ChipAI.

Amount saved above £2,000	Interest after fee	Real interest rate
£1,000	-£7	-0.7%
£1,500	-£0.71	-0.05%
£2,000	£5.50	0.275%
£2,500	£11.75	0.47%
£2,750	£14.50	0.53%
£3,000	£17	0.57%

As you’ll see when compared to the next account, it only becomes something worth considering if you put the full £3,000 extra in, meaning there’s £5,000 in total saved with Chip+1.

There are a few other things worth knowing about with Chip+1, so make sure you read my full review.

Download Chip and enter the code BCLEVER21 to join Chip +1

Account 3: 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

My third pick after Virgin Money and Chip+1 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. Save the full amount for a year 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.

Second, you need to pay in £1,500 a month to avoid a monthly £3 fee. But that cash doesn’t have to stay in the account, so you can use it for bills, spending or just transfer it out to another account.

You also get access to my top pick of regular savers. The Club Lloyds Monthly Saver pays 1.5% and you can deposit up to £400 a month. If you put the full amount in for a year (when the account closes), you’ll have saved £4,800 and make an extra £38.91 in interest.

If you don’t have this much each month to add to savings, don’t forget you can funnel money over from lower paying accounts.

It might be worth hanging on before applying for the Club Lloyds current account as there are often switching bonuses of around £100 to £125. The account also offers freebies such as a 12 month magazine subscription or six cinema tickets.

Here’s my full review of the Club Lloyds account.

Need more accounts?

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
Chip+1 (ChipLite plan)	£2,000	£25
Club Lloyds Current Account	£5,000	£39
Club Lloyds Monthly Saver	£4,800	£38.91

That’s a total interest of £123.11 on £12,800 put aside. That’s the equivalent of 0.96%.

The same amount in the top-easy access account (0.55%) would earn you £70.44. So these three accounts is worth an extra £52.67.

For most of us, we don’t really need to save more than this in cash savings. Assuming monthly regular expenses of £2,000, this is 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?

Good news! You can stick with the same accounts. This is when you might want to put the extra in Chip+1 and pay the fee – but only if you can add in at least £2,000.

And remember that Virgin Money linked account paying 0.5%? Well it’s sad to say it’s as good as any other right now.

If you have £10,000 or more as a block to stash above that initial £8,000, then it’s worth looking at Premium Bonds. That’s the rough tipping point where your chance of winning prizes beats what you’d get at 0.5% – though there’s no guarantee.

Finally, you might have spotted there’s a 12-month fix paying 1% (well at the time of writing). Isn’t that better than everything other than the VIrgin account and Chip+1? Well, yes. But with the exception of the regular saver, the three accounts listed are all easy access, meaning you can get it when you need.

A fix is not a bad option for money you can lock away, or money you have on top of this initial stash. You can read more about the best rates right now in my regularly updated list.