Top savings accounts
Up to 5.2% easy access or up to 5.16% fixed
After years of minimal returns, savings have experienced a notable resurgence in the past year. Although interest rates are starting to decline from recent highs, the best savings accounts still offer returns that outpace inflation. This provides an excellent opportunity to maximize your money’s potential. Below, we highlight the top easy-access, notice, and fixed-rate accounts.
Top-pick savings accounts
- Easy-access savings: allows withdrawals
- Notice savings: give notice to withdraw
- Fixed-term accounts: must lock cash away
What is a savings account?
A savings account is essentially a spot where you can deposit your money and accrue some interest.
The interest you earn on savings is generally tax-free for most individuals. Basic-rate taxpayers are allowed to earn up to £1,000 annually in interest without paying tax, while higher-rate taxpayers can earn up to £500 tax-free due to the personal savings allowance.
With rising interest rates, a basic-rate taxpayer would need approximately £19,000 in easy-access savings at the best rates, or £18,000 in top fixed rates, to hit this allowance threshold and start incurring tax. If you’re approaching this limit, it’s advisable to consider a cash ISA, as the interest earned in these accounts is always tax-free and doesn’t affect your personal savings allowance.
Your savings are safe – up to £85,000 is protected per bank or building society
Every bank or building society referenced in this guide is fully regulated in the UK, ensuring each person has £85,000 of protection if the institution fails (£170,000 for joint accounts). However, be aware that some banks are interconnected, which means this protection is combined. For detailed information, refer to “Are your savings safe?”
How to choose the right savings account
There are various kinds of savings accounts available, and it can be overwhelming to understand the purpose of each. This guide zeroes in on the most recommended ‘standard’ savings accounts, though there are alternative methods to enhance your earnings. Here are our top suggestions to help you determine the optimal place to invest your funds…
1 – If you’ve got debts or a mortgage, overpaying often beats saving
When dealing with costly debt, it’s usually wise to focus on paying it off before prioritizing savings. For instance, if you have £1,000 in a high-yield savings account, you might earn around £50 annually. In contrast, £1,000 of credit card debt with a 24% APR could rack up £240 in interest per year. By using your savings to pay off the debt, you could be over £190 better off. For more details, check out Repay debts or save?
If you’re managing a mortgage, a similar principle applies, though there are some nuances. For further information, refer to Overpay mortgage with savings? and use the Mortgage Overpayment Calculator.
2 – Need instant access to your cash? Go for easy access
Accounts with easy access allow you to withdraw funds whenever you need them, though some may restrict the number of withdrawals you can make each year. These accounts usually offer lower interest rates compared to other types, but they are ideal for holding money that you anticipate needing soon or on a regular basis.
Be sure to watch out for introductory ‘bonus’ rates. These temporary interest increases are designed to attract new customers and can be beneficial, as they provide a guaranteed minimum interest rate during the promotional period. However, it’s important to remember when this bonus period ends so you can switch accounts promptly and avoid being stuck with a less favorable rate afterward.
Or, boost rates but still keep some access…
Easy-access accounts are the most straightforward savings option, allowing you to deposit large amounts and withdraw funds as needed. However, this convenience comes with the trade-off of lower interest rates. Despite this, many people leave their money in these accounts for years without using it, reasoning that they might need to access it eventually. To offer better returns while still maintaining some access to your funds, consider higher-paying accounts. You can also diversify your savings by splitting your money across multiple accounts, if that fits your needs.
- Boost 1: Fixed cash ISAs – let you access cash in an emergency. With standard fixed savings accounts, you commit your money for a set period in exchange for higher, guaranteed interest rates, but you forfeit access to your funds during this time. On the other hand, tax-free fixed-rate cash ISAs offer slightly lower interest rates, yet they come with the benefit of allowing you to access your money if necessary—though this might involve a penalty. Given that the interest rates on these ISAs are significantly higher than those of easy-access accounts, they are a better choice if you don’t plan on needing the funds immediately but still want the security of being able to access them if required.
- Boost 2: Use a notice account if you know, or will know, when you’ll need to withdraw. Notice accounts necessitate that you provide advance notice before accessing your funds. These accounts are ideal if you have a clear idea of when you’ll need your money. For instance, if you’re saving for a home, you should be able to plan ahead. Check out the top-paying notice accounts for the best returns.
- Boost 3: Short-term fixes work if you know exactly when you’ll need the money. If you have a clear idea of when you’ll require your funds—such as for upcoming mortgage overpayments—you can choose to secure it in a short-term fix for six or nine months. If you know you’ll need the money later but can afford to wait a bit longer, consider exploring longer-term fixes.
3 – Lock cash away in return for higher fixed rates
A fixed-rate account is a type of savings account where your interest rate remains constant for a predetermined period. Typically, you cannot withdraw the funds during this term without facing significant penalties.
Generally, fixed rates offer higher returns compared to easily accessible savings accounts. However, if standard savings rates were to rise during your fixed term, you would be unable to switch to a higher-yielding account until the end of your fixed term.
4 – Wannabe first-time buyer? A Lifetime ISA gives a 25% boost, so should be your first port of call
The Lifetime ISA (LISA) program offers a 25% enhancement to your savings, making it an essential option if you’re planning to buy your first home.
Individuals between the ages of 18 and 39 are eligible to open a LISA, where they can contribute up to £4,000 per tax year. This can be done as a lump sum or through periodic deposits. For every amount saved, the government adds a 25% bonus. For instance, saving £1,000 will result in a total of £1,250 with the bonus.
First-time homebuyers can apply these savings and the bonus towards a deposit for any residential property valued up to £450,000, provided they’ve had the LISA for at least 12 months. However, be cautious—if the funds are withdrawn for purposes other than buying a first home or retirement at age 60 or older, a 25% penalty typically applies. For more details, consult our Lifetime ISAs guide.
5 – On Universal Credit or Tax Credits? Help to Save gives a 50% bonus, so smashes other accounts
The Help to Save program, introduced by the Government, aims to motivate individuals receiving Universal Credit or Working Tax Credits to set aside money. Participants can earn a 50% bonus on their savings, with the potential to accumulate up to £1,200 in bonuses over a four-year period.
For comprehensive details about the scheme, including guidance on when it is advantageous or not to participate, refer to our Help to Save guide.
6 – A cash ISA is the likely winner if you pay tax on savings interest (most don’t)
The personal savings allowance (PSA) allows many individuals to avoid paying tax on their savings. Consequently, choosing whether to invest in a cash ISA often boils down to selecting the account with the best interest rate.
If you’ve hit your PSA limit—£1,000 in interest for basic-rate taxpayers or £500 for higher-rate taxpayers—it’s wise to explore a cash ISA. This type of account ensures that you won’t be taxed on the interest earned.
Check out our Top Cash ISAs guide for the latest high-yield options and a comprehensive evaluation to determine if opening one is right for you.
7 – Happy to open a current account? You can boost interest on small amounts
Interestingly, certain banks offer current accounts or associated savings accounts with interest rates that surpass those of typical savings accounts. However, these higher rates usually apply only to smaller balances, often up to around £4,000. Additionally, unlike savings accounts, you must pass a credit check to qualify for these accounts.
For information on the top-paying accounts, refer to our Best Bank Accounts guide.
8 – If you’re able to save monthly, regular savings accounts often pay high rates on small amounts
These particular financial products enable you to save between £50 and £500 each month, depending on the account’s maximum deposit limits. The key benefit is that they generally offer higher interest rates compared to regular savings accounts. For comprehensive information and top recommendations, check out the complete guide to Regular Savings Accounts.
9 – If you’re saving for your kids, children’s accounts often pay better rates
If you have children under 18, you have the option to open a dedicated savings account for them. These accounts often resemble those available for adults—offering features like easy access, fixed rates, and ISAs—but sometimes the interest rates can surpass those found in adult accounts. Additionally, it’s an excellent opportunity to instill the value of early saving in your kids.
You can set up a junior ISA to secure funds until they turn 18. If this doesn’t suit your needs, take a look at our Kids’ savings guide for alternative options.
10 – You can split money across different accounts to get a mix of benefits
If you have a substantial amount to save, consider opening multiple savings accounts to optimize your returns. For instance, with £20,000 in savings and a need for £5,000 in two months, you could allocate £5,000 to a high-yield easy-access account and deposit the remaining £15,000 into a one-year fixed-rate account.
If you’re uncertain about how to manage your funds, place your money—up to the insured £85,000—into a leading easy-access account while you make your decision.
11 – Want green savings? They do exist, though you’ll usually need to accept lower interest rates
As an ExEconomics website, our primary focus is on interest rates, so we feature accounts offering the highest rates in each category within this guide, regardless of which financial institution provides them.
Occasionally, the top offers can shift multiple times a day. We lack the means to meticulously investigate each savings provider’s investment practices or their use of savings balances for lending.
For those prioritizing eco-friendly options, we offer a separate Green Savings Guide. This guide highlights banks and building societies that commit to environmental sustainability or use your deposits to support green projects.
Additionally, we provide an Ethical Banking Guide, which serves as a useful resource for finding accounts that support positive causes or avoid negative ones.
However, it’s important to note that these ethical and green accounts typically offer lower interest rates compared to the top-rated options in this guide, often requiring a balance between interest rates and environmental or ethical considerations.
Top easy-access savings
The primary concept behind easy-access accounts is that you deposit cash into them, earn interest on the balance, and have the flexibility to withdraw funds at any time. This is particularly beneficial if you anticipate needing to access the funds regularly due to the ongoing cost of living pressures.
Interest rates for these accounts are variable, meaning they can fluctuate. You’ll receive notifications of any changes, but it’s wise to frequently check the comparison table below for the best available rates. If your account’s rate is falling short, you can easily transfer your funds to a better-performing account.
If you prefer a guaranteed interest rate, you might need to forgo this flexibility by opting for a fixed savings account, where your money is locked in for a set period.
Easy-access accounts – what we’d go for
For the best available return on your savings along with the tax advantages of an ISA, beginning with an easy-access cash ISA is a smart choice.
For those interested in a savings account, Close Brothers offers a top-tier option with an interest rate of 4.9% and unlimited withdrawals. However, you’ll need a minimum deposit of £10,000 to open this account. On the other hand, if you’re comfortable with limited access to your savings, Principality BS provides a higher rate of 5%, though it restricts you to three withdrawals per year. Both accounts can be initiated with just £1.
Ulster Bank (owned by NatWest) – 5.2%
Want to max every penny? Ulster Bank (owned by NatWest), offers a higher rate of 5.2%. To take advantage of this rate, you’ll need to open a current account with them, which involves a thorough credit check. Additionally, the account doesn’t come with notable benefits.
Prefer an established name? Cahoot (owned by Santander) pays the top big-name rate at 4.85% with unlimited withdrawals. The account can be opened easily online with £1.
Willing to work a little for higher rates? You can enhance your returns by holding a Santander Edge current account or by accepting a lower maximum deposit. For comprehensive details, refer to the table below.
A PS about Close Brothers. The table below displays the information ranked according to the highest rates. We’ve received several inquiries regarding this, particularly since its stock value dropped due to issues with car finance mis-selling. This might explain its efforts to attract deposits. Importantly, as with all regulated banks, there is a full UK savings safety guarantee of up to £85,000 per individual, per bank. If your savings exceed this amount, it’s wise to be cautious and diversify your funds, and this advice is especially relevant in this case.
| Top savings accounts. All have the full £85,000 savings protection. | |
| Top paying accounts
(In rate order – see what we’d go for) |
Top well-known name accounts
(As many tell us you prefer names you know) |
| Requires hard credit check
NatWest-owned Ulster Bank, 5.2% – Min £5,000, no max – Open online (or in branch for NI residents) – Can access interest annually – Requires an Ulster current account |
Santander-owned-Cahoot, 4.85% (lasts 1yr)
– Min £1, max £500,000 – Open online – Can access interest monthly and annually – Sole or joint accounts |
| Max three withdrawals/year
Principality BS, 5% – Min £1, max £1m – Open online – Can access interest annually |
Leeds BS, 4.8% (matures 1 Sep 25)
– Min £1,000, max £1m – Open online – Can access interest at maturity – Sole or joint accounts |
| Close Brothers 4.9%
– Min £10,000, max £2m – Open online – Can access interest annually – Sole or joint accounts |
Max three withdrawals/year
Virgin Money, 4.76% – Min £1, max £250,000 – Open online – Can access interest monthly or annually – Sole or joint accounts |
| Kent Reliance, 4.85%
– Min £1,000, max £1m – Open online or in branch – Can access interest monthly or annually – Sole or joint accounts |
Tesco Bank*, 4.66% (lasts 1yr)
– Min £1, max £1m – Open online – Can access interest annually – Sole or joint accounts |
| Ways to boost your interest. Some non-standard accounts pay higher rates. | |
| Requires hard credit check
Santander Edge, 6% (click link for info) – Min £1, max £4,000 – Open online, via its app or in branch – No joint accounts – Requires a Santander Edge current account |
Santander-owned-Cahoot, 5.2% (lasts 1yr)
– Min £1, max £3,000 – Open online – Sole or joint accounts |
All rates are AER. These banks share FSCS protection: Ulster Bank and NatWest, Santander and Cahoot.
Keep in mind that all cash in the accounts mentioned is safeguarded up to £85,000 per individual, per financial institution. If your savings exceed £85,000, it’s wise to distribute them across multiple banks to ensure protection if one of them encounters financial issues.
Why do you include accounts which limit withdrawals?
We feature these accounts due to their typically superior rates, which can be advantageous for individuals who don’t require frequent access to their savings. Nonetheless, we also highlight top accounts that allow unlimited withdrawals, giving you the flexibility to choose the option that best fits your needs.
If you have an account with withdrawal limitations, it’s important to understand the consequences of exceeding them. Some accounts may reduce the interest rate if you withdraw too often, while others might close the account and move your funds to one with a lower interest rate.
What’s the difference between an account with a bonus rate and one without?
Bonus rates are short-term interest increases designed to attract new customers. Be aware that these rates will inevitably decrease once the promotional period concludes, so it’s wise to switch accounts after the bonus ends.
Bonus rates can be advantageous because they offer a guaranteed minimum interest rate during the introductory phase, ensuring you earn some return. However, keep in mind that the rate could still decrease during the bonus period if the underlying non-bonus rate drops.
On the other hand, accounts with clean rates do not offer any bonuses. These accounts have fully variable rates, meaning the interest rate could be reduced by the provider shortly after opening the account.
From our observations, most savings accounts tend to become less favorable over time. However, proactive savers can mitigate this by transferring their funds to a higher-paying account as soon as they notice their current rate declining.
Top notice savings accounts
These types of accounts necessitate advance notice before you can access your funds. They are ideal for individuals who anticipate needing their money in the future but cannot specify the exact timing of their withdrawal.
For instance, if you’re a first-time homebuyer, you will eventually require your savings for a deposit. However, the timing of finding your perfect home could vary, from two months to even ten months. A notice account with a shorter notice period could offer a higher interest rate while still providing you with enough time to access your funds when you need to complete the purchase.
Notice accounts – what we’d go for
Notice accounts require you to wait a bit before you can access your funds, but they offer higher interest rates compared to easy-access accounts. Currently, they provide better returns than fixed-term accounts, although their rates are variable and can fluctuate over time.
The choice of which notice account to select depends on the length of time you are prepared to wait…
The top payer is Vanquis Bank at 5.35% for 90 days’ notice, 5.3% for 60 days’ notice and 5.05% for 30 days’ notice. Interest can be paid monthly or annually either into the account or out to a separate bank account.
Alternatively, Family BS pays 5.25% on its 35 days’ notice account, though you’re unable to make any withdrawals and you can only save exactly £10,000. This is essentially a very short-term fix but with a variable rate that tracks the Bank of England base rate – though with the short notice period you won’t be locked in for long should the rate go down, so it could be a decent option if you know you won’t need to access your savings.
| Provider | Rate (AER variable) | Notice | When is interest paid? | Min/max deposit | How to open |
Top standard notice accounts. Here are the highest paying traditional savings accounts.
Vanquis Bank – 5.35% for 90 days |
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| Vanquis Bank | 5.35% | 90 days | Monthly or annually, paid into the account or paid away | £1,000/ £250,000 | Online |
| 5.3% | 60 days | ||||
| 5.05% | 30 days | ||||
| Family BS | 5.25% (no withdrawals) |
35 days | Annually, paid into account | Can only save exactly £10,000 | Online/ phone/ post |
All have Financial Services Compensation Scheme savings protection of up to £85,000.
Do I always have to give notice on these accounts?
The brief answer is affirmative. The name says it all!
While some notice accounts might offer quicker access to your money, often charging an interest penalty for early withdrawals, such options are relatively rare.
Generally speaking, if there’s a possibility you’ll need prompt access to your funds at any point, it’s wiser to choose an easy-access account.
What happens if my provider changes the interest rate?
Typically, a savings provider will notify you in advance, allowing you ample time to withdraw your funds if desired. For instance, if your money is held in a 95-day notice account, the provider would usually alert you 95 days in advance, plus additional time—often a couple of weeks more.
However, some providers might adjust the interest rate before the notice period ends. In such cases, they should offer you the opportunity to access and withdraw your funds without adhering to the full notice period stipulated by the account.
Top fixed-term savings accounts
When you invest in fixed savings, your money is typically tied up until the end of the term, but in exchange, you receive a guaranteed interest rate. Therefore, it’s best to commit only the funds you’re sure you won’t need access to during this period.
For those seeking a fixed rate with the option to withdraw, a cash ISA is worth considering. By law, cash ISAs must permit withdrawals, although this may come with a fee.
Currently, fixed-rate savings accounts with terms of a year or less offer more competitive rates than those with longer durations. Interestingly, notice accounts are offering the highest rates at present, and the top rates for easy-access accounts are just slightly lower than those of fixed accounts. This presents a key decision: do you prefer the flexibility of an easy-access or notice account, or the stability of a fixed-rate account?
Keep in mind, however, that if interest rates rise, locking in a rate for a longer term means you might miss out on the chance to switch to a better offer later.
For fixes that go across more than one tax year, when you can access the interest matters.
Basic-rate taxpayers are entitled to a tax-free interest allowance of £1,000 annually through their personal savings allowance (PSA). For those in the higher-rate tax bracket, this allowance is reduced to £500. If you accumulate all your interest from long-term fixed savings in a single year, there’s a risk of surpassing your PSA limit, potentially resulting in a higher tax liability.
– Fixes less than a year – what we’d go for
Short-term fixed rates currently offer better returns compared to longer one- and two-year fixed rates, although the difference has significantly decreased in recent months. Additionally, many of the top rates have vanished following the recent Bank of England base rate cut.
The highest available rate is offered through an online ‘savings marketplace,’ which partners with banks to provide savings accounts at often higher rates than those directly available from the banks. When you open an account through such a marketplace, you deposit your funds into the marketplace, which then transfers them to the selected savings account.
Isbank provides the leading six-month fixed rate of 5.16%, accessible via Flagstone (click the link for more details). If you’d prefer to open an account direct, you’ll need to sacrifice on rate, with Zenith Bank’s 5.05% being the top rate.
| Provider | Rate (AER) + fix length | When can I get the interest? | Min/max deposit | How to open |
Top shorter-term fixes. Here are the highest paying six-month accounts.
Isbank via Flagstone – 5.16% for six months |
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| Isbank via Flagstone
(online ‘savings marketplace’) |
5.16% for six months | At maturity | £10,000/ £85,000 | Online |
| Zenith Bank | 5.05% for six months | At maturity | £1,000/ £1m | Online |
All have Financial Services Compensation Scheme savings protection of up to £85,000.
– One-year fixes – what we’d go for
Opting for a one-year fixed-term investment that pays interest ‘at maturity’ means that the interest will be applied towards your tax-free allowance for the upcoming tax year, not the current one. In contrast, if interest is paid monthly, it will be included in the tax year during which it is received. However, keep in mind that you won’t earn interest on the interest paid out monthly. For more detailed information on tax implications for savings interest, refer to the tax on savings interest guidelines.
Top standard one-year fix. MBNA offers a competitive interest rate of 5.15% (with a minimum deposit of £1,000). Although you can set up the account online, management is exclusively conducted over the phone—so don’t anticipate receiving payment confirmations or correspondence by mail. To monitor your account, you’ll need to call and complete a brief security check. However, once that’s done, their response time is generally quite prompt.
| Provider | Rate (AER) | When can I get the interest? | Min/max deposit | How to open |
Top standard one-year fixes. Here are the highest paying traditional savings accounts.
MBNA – 5.15% for one year |
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| MBNA
(part of Lloyds Group) |
5.15% | At maturity | £1,000/ £750,000 | Online
(manage by phone, no joint accounts) |
| StreamBank | 5.05% | Monthly or at maturity | £1,000/ £1m | Online
|
| Investec | 5.04% | At maturity | £5,000/ £250,000 | Online (no joint accounts) |
| Top rates from established names. As we know some prefer to save with bigger brands. | ||||
| Tesco Bank | 4.81% | Monthly or at maturity | £2,000/ £5m | Online/ phone |
All have Financial Services Compensation Scheme savings protection of up to £85,000.
– Two-year fixed savings – what we’d go for
If you’re opting for a two-year fixed-term investment, it’s important to understand the tax consequences related to how you receive your interest. Accounts that disburse interest ‘at maturity’ do so in a lump sum, potentially pushing you above your personal savings allowance (PSA) for the year in which the account matures, which could result in a tax liability on the interest earned. On the other hand, accounts that distribute interest on a monthly or annual basis might help you remain within your PSA limit, as the interest is divided across different tax years. However, be aware that in this scenario, the interest will not compound.
Harpenden BS pays the top two-year rate at 4.96% (min £1,000) with interest paid at maturity.
Prefer an established name? NS&I pays 4.6% for its two-year fix (min £500). Although the interest rate is lower compared to others, NS&I is government-owned. This means that, unlike typical accounts where savings are insured up to £85,000 per institution, every pound deposited here is guaranteed by the Treasury, ensuring maximum security.
| Provider | Rate (AER) | When can I get the interest? | Min/max deposit | How to open |
Top standard two-year fixes. Here are the highest paying traditional savings accounts.
Harpenden BS – 4.96% for two years |
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| Harpenden BS | 4.96% | At maturity | £1,000/ £1m | Online/ post/ branch |
| Birmingham Bank | 4.91% | Annually | £5,000/ £250,000 | Online |
| United Trust Bank | 4.85% | Annually or at maturity | £5,000/ £1m | Online |
| Top rate from an established name. As we know some prefer to save with bigger brands. | ||||
| NS&I | 4.6% | Monthly
At maturity |
£500/ £1m | Online |
All have Financial Services Compensation Scheme savings protection of up to £85,000.
– Three- and five-year fixes – are they worth it?
At present, the disparity in interest rates among fixed-term accounts, whether they last one year or five, is relatively small. This means there’s minimal advantage to committing to a longer-term account unless you seek guaranteed returns over an extended period.
If you decide to lock in your funds, be aware of the tax consequences associated with how interest is paid. Accounts that provide interest ‘at maturity’ deliver it as a lump sum, which might exceed your personal savings allowance (PSA) for that year and result in a tax liability on the interest earned. On the other hand, accounts that distribute interest monthly or annually could help you stay within your PSA limit by spreading the interest across multiple tax years, though this approach may not benefit from compounding interest.
Birmingham Bank pays the top three-year fixed rate at 4.71% and five-year fixed rate at 4.51% (min £5,000). Both can be opened and managed online.
Prefer an established name? Top rates here come from NS&I at 4.35% for three-years and 4.1% for five-years (both min £500). While the interest rates might be lower compared to other options, NS&I is backed by the government. Unlike standard accounts, where your savings are protected up to £85,000 per institution, every pound you deposit with NS&I is fully guaranteed by the Treasury, offering the highest level of security.
Three-year fixed rates
| Provider | Rate (AER) | When can I get the interest? | Min/max deposit | How to open |
Top standard three-year fixes. Here are the highest paying traditional savings accounts.
Birmingham Bank – 4.71% for three years |
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| Birmingham Bank | 4.71% | Annually | £5,000/ £250,000 | Online |
| United Trust Bank | 4.7% | Annually or at maturity | £5,000/ £1m | Online |
| Oxbury | 4.66% | At maturity | £1,000/ £500,000 | Online, smartphone required (no joint accounts) |
| Top rates from established names. As we know some prefer to save with bigger brands. | ||||
| NS&I | 4.35% | Monthly
At maturity |
£500/ £1m | Online |
All have Financial Services Compensation Scheme savings protection of up to £85,000.
Five-year fixed rates
| Provider | Rate (AER) | When can I get the interest? | Min/max deposit | How to open |
| Top standard five-year fixes. Here are the highest paying traditional savings accounts. | ||||
| Birmingham Bank | 4.51% | Annually | £5,000/ £250,000 | Online |
| United Trust Bank | 4.5% | Annually or at maturity | £5,000/ £1m | Online |
| Hodge Bank | 4.49% | Monthly or at maturity | £1,000/ £1m | Online |
| Top rates from established names. As we know some prefer to save with bigger brands. | ||||
| NS&I | 4.1% | Monthly
At maturity |
£500/ £1m | Online |
All have Financial Services Compensation Scheme savings protection of up to £85,000.
How do online savings platforms work?
Savings platforms, also known as savings marketplaces, provide access to accounts from a range of partner banks, frequently offering higher interest rates than those available directly through the banks. They serve as a convenient method for switching between different accounts, although the rates may not always be the most competitive. Prominent players in this area include Raisin, Flagstone, and Hargreaves Lansdown Active Savings.
Are my savings safe?
Raisin
Raisin accounts are managed by ClearBank, which is overseen by the Financial Conduct Authority. When you deposit money into a Raisin account, before it’s allocated to your selected savings product, your funds are safeguarded by ClearBank’s £85,000 Financial Services Compensation Scheme (FSCS) coverage.
Note: The app-only Chip, often highlighted in this guide, is also backed by ClearBank’s protection, so remember that the £85,000 coverage limit applies if you hold both accounts.
Here’s where it gets a bit intricate, so bear with us. For the accounts listed above, your deposits are automatically transferred through Meteor Investment Management (MIM), which forwards the funds to the bank managing your selected account. The funds are then protected by that bank’s £85,000 FSCS coverage.
During the brief period MIM holds your funds, they are technically kept in a MIM client account with RBS. The FSCS has confirmed that even in this arrangement, you still benefit from the UK £85,000 per person, per institution savings protection provided by the account provider (the protection extends through RBS while your funds are in transit from your Raisin UK account to the final bank).
Important: This guide only includes accounts protected by the UK FSCS, but keep in mind that not all banks partnered with Raisin are covered by the FSCS. Some are protected by European deposit schemes, which might make recovering your money more challenging if the bank fails. For additional details on savings protection, refer to “Are your savings safe?”
Hargreaves Lansdown Active Savings
Funds deposited in a bank or building society through Hargreaves Lansdown’s Active Savings platform are safeguarded by the Financial Services Compensation Scheme (FSCS) for that specific institution. Should the bank or building society encounter financial difficulties, your savings are protected up to £85,000. However, retrieving your funds might take longer compared to if you had deposited directly with that institution. This protection also extends to situations where Hargreaves Lansdown itself might face failure.
Savings that have not yet been invested through Active Savings are held in what Hargreaves Lansdown refers to as a cash hub. This cash hub is secured by Barclays, meaning that your funds are protected by the Financial Conduct Authority’s safeguarding measures. There is no £85,000 limit on this protection, and Hargreaves Lansdown would not have access to your funds if it failed. Nevertheless, administrative costs might be incurred, and accessing your money could be slower than if you had saved directly with a bank.
In the event of Barclays’ collapse, rather than Hargreaves Lansdown, your savings in the cash hub would still be covered up to £85,000 by the FSCS. Be aware, however, that any additional funds you hold directly with Barclays would count towards the same £85,000 limit.
Flagstone
Before you open a savings account with Flagstone’s partner banks, your funds will be initially stored in a Flagstone holding account. This account is managed by HSBC and is protected by FSCS coverage up to £85,000. Once you transfer your funds into a specific savings account, those funds will be held by the respective bank. As long as that bank is part of the FSCS, your eligible deposits will be safeguarded in the event of the bank’s failure.
While your funds are in the Flagstone holding account, they are managed within a trust structure. This ensures that you remain the exclusive beneficial owner of your money. Consequently, if Flagstone were to go under, it would have no claim to your funds. Any money in your holding account would remain secure, as the account itself is administered by HSBC.
Important – you’ll need to take action when your fixed term ends
Before your fixed term concludes, you’ll receive an email prompting you to decide what to do with your funds. You can either have the money transferred back to your bank account or use it to open another product with the savings platform. Keep in mind that the rates offered at that time may not be the most competitive, so it’s wise to review your options.
If you don’t respond, the funds will automatically revert to your Raisin UK account, Hargreaves Lansdown cash hub, or Flagstone Hub account, where they will earn no interest.
Important: Hargreaves Lansdown might return the funds to your designated account if they remain in the cash hub for over 30 days.
Is there anything else I should know?
If you encounter any problems with your account, it’s essential to reach out directly to the savings platform. You can get in touch with any of the providers we mention via email, phone, or secure messaging once you are logged in online.
Raisin collaborates with approximately 40 banks, Hargreaves Lansdown partners with around 20, and Flagstone works with about 65. Consequently, their product selections do not encompass the entire market, which means they may not always offer the best rates available. Before opening a new account through these platforms, consult this guide to verify if a better rate is available elsewhere.
Want to complain about your savings provider?
If your savings provider has applied the wrong interest rate or failed to credit your interest altogether, you don’t have to accept it quietly. It’s a good idea to start by contacting your provider directly to seek a resolution. If that doesn’t work…
You can use free complaints tool Resolver. The tool helps you manage your complaint, and if the company doesn’t play ball, it also helps you escalate your complaint to the free Financial Ombudsman Service.
Savings Q&A
Q – What’s the top account for joint savings?
A – A frequent inquiry is whether savings accounts can be held jointly. In fact, many savings accounts do allow for two account holders. Therefore, the real question should be: “What is the best savings account?” This guide is designed to help answer that.
Unless specified otherwise, all the savings accounts mentioned can be set up as joint accounts. If you’re interested in saving with another person, you can explore our lists of top easy-access accounts, top notice accounts, and top fixed-rate accounts.
For accounts that cannot be opened jointly, this limitation is clearly noted in the corresponding table.
Q – My building society has a better rate than accounts here. Why isn’t it featured?
A – ExEconomics.com is a comprehensive resource serving England, Scotland, Wales, and Northern Ireland. We aim to highlight accounts accessible to everyone, which means they should be available to open online, through an app, by phone, or via mail.
Accounts requiring branch visits are trickier to include, especially if they’re not offered by major banks. For instance, Skipton Building Society may provide attractive branch-based accounts, but a resident of Brighton would need to travel nearly 40 miles to access a branch. Similarly, someone in Carlisle might find it challenging to open a branch-based account from Ipswich Building Society due to the lack of nearby branches.
Local building societies occasionally offer exceptional branch-based accounts, but due to our nationwide focus, we cannot feature every option available.
Q – Are there savings accounts designed for my business?
A – If you hold a business current account, it’s probable that it offers 0% interest. As a result, any business funds you have on hand, even those reserved for tax payments, aren’t earning any interest.
For sole traders, it’s usually more advantageous to place the business’s funds in a personal savings account, as these often provide better interest rates. However, if your business is set up as a limited company, you’ll need to use a dedicated business savings account designed for this purpose.
Q – How do inflation and deflation affect my savings?
A – To accurately gauge the performance of your savings, you need to compare them against the inflation rate. Inflation represents the rate at which prices rise over time. If your savings don’t outpace inflation after accounting for taxes, they are effectively diminishing in value.
Are your savings ‘losings’? (Spoiler: almost certainly, yes)
A savings account that offers an interest rate lower than the inflation rate is diminishing your wealth. Given the current inflation rate exceeding 6%, no savings account can keep pace.
To illustrate how inflation and interest rates affect your money, consider this straightforward example…
Imagine inflation is 10%… Things costing £1 this year will then cost £1.10 next year.
You have £1 in a savings account at 5% interest… By next year, it will have grown to £1.05.
Therefore, saving has reduced your spending power by 5p a pound… It’s a ‘losings’ account, not a savings account.
What about deflation?
Of course, sometimes prices drop – as happened in 2009 – and you get negative inflation, known as deflation. This can sometimes be a positive for savers.
Imagine inflation is minus 2%… Things costing £1 this year will then cost 98p next year.
You have £1 in a savings account. The interest rate has fallen to 1%… Despite the lower rate, by next year your savings will have grown to £1.01.
Therefore, saving has increased your spending power by 3p a pound… Even though the interest rate has plummeted, you’re actually better off.
This situation has significant implications. Many people adhere strictly to a savings mentality that says, “Don’t touch your capital!” However, in a deflationary setting, this approach can be too inflexible. Those relying on interest from their savings might experience substantial reductions in income, and avoiding the use of capital can end up being detrimental.
Inflation rates can differ for individuals, but if you’re facing deflation and need to draw from your savings, it’s possible to do so without depleting your funds. By withdrawing money at the rate of deflation, you maintain your purchasing power and avoid financial loss.
Q – Can I open an account through Power of Attorney?
A – Not every provider permits the opening of a new account on behalf of someone else via Power of Attorney. For those that do, you’ll generally need to reach out to the provider’s customer support team to set up a new Power of Attorney account and supply the necessary documentation.
Below, we’ve highlighted some providers commonly featured in our savings guides that explicitly allow new accounts to be opened through Power of Attorney. Check these providers and compare their rates to those listed in the tables above to find the most competitive options.
If you’re interested in opening an account for someone else, consult the FAQs for a dedicated Power of Attorney section or contact the provider’s customer support. Be aware that some providers may have specific requirements, such as needing sole signatories.
Here are the providers that allow account openings through Power of Attorney:
For comprehensive details on how to register a Power of Attorney with your bank or to open new accounts on behalf of a donor, refer to our guide, “Which Bank is Best When You Have Power of Attorney?”
Q – How do sharia accounts work?
A – Sharia-compliant accounts adhere to Islamic banking guidelines, which forbid interest payments. Instead, they offer ‘expected profit’ rates, which means returns are not assured. However, to date, no Sharia-compliant banks in the UK have failed to deliver their anticipated returns.
These accounts are accessible to individuals of any religious background, and those listed are fully regulated by UK authorities, providing savings protection of up to £85,000 per person, per institution. Additionally, Sharia banks avoid investments in sectors such as gambling and alcohol.
Q – Why do you list AER interest when not all these fixed accounts pay it?
A – We present the Annual Equivalent Rate (AER) because it offers the most effective method for comparing interest rates.
Savings accounts can have varying interest payment structures. The majority deposit interest directly into the fixed account, allowing your interest to accumulate over time.
However, some banks transfer interest into separate accounts. In these cases, you won’t earn interest on your accrued interest, resulting in a slightly lower effective rate compared to the AER.
While it might seem advantageous to have interest paid directly into your fixed account, this could lead to a higher tax liability.
Q – When should I choose to have my interest paid?
A – For certain accounts, you have the option to direct interest payments to an external account, such as your bank account, whereas other accounts may deposit the interest directly back into the fixed-term account.
Additionally, you can frequently decide on the frequency of interest payments, whether that’s monthly, annually, or at the end of the term.
The timing of when you can ACCESS the interest is crucial, particularly for tax purposes, and this might not always align with when the bank actually disburses the interest. To clarify this further, here’s an illustrative example…
Imagine you save £10,000 in a five-year fix which pays 4.5%.
Option 1: Interest is credited annually from your savings account to your bank account, making it available for you to access upon payment.
In this scenario, you would receive £450 annually over a period of five years. Since the interest earned is below the personal savings allowance thresholds for basic and higher-rate taxpayers (£1,000 and £500 per year, respectively), it would be tax-free.
By the end of the five-year term, you would accumulate a total interest of £2,250.
Option 2: Each year, the interest is reinvested into the fixed account, and access to it is restricted until the account reaches maturity.
In this scenario, interest accrues on the previously earned interest. Consequently, after a five-year period, you would accumulate £2,460—approximately £200 more than with the initial option.
However, because the interest is inaccessible until the end of the five-year term, it all contributes to the PSA (Personal Savings Allowance) for the fifth year, surpassing both the basic- and higher-rate thresholds. This results in a tax liability of about £292 for those on a basic rate and £784 for those on a higher rate.
Therefore, overall, basic-rate taxpayers would be £80 worse off compared to the first option, while higher-rate taxpayers would face a substantial £570 disadvantage.
Some individuals might prefer to receive interest payments deposited into a bank account on a monthly or annual basis, spreading the payments over several years. Conversely, others may choose to have all interest paid in a lump sum at the end, which can be advantageous if, for instance, they are retiring and expect to be in a lower tax bracket.
This is complex, so check with your savings provider about when you can access the cash, then call HM Revenue & Customs on 0300 200 3300 (call charges may apply) so it can help you declare the income for tax purposes in the right year, if you need to.