Consecutive Bank of England Base Rate rises have prompted banks and building societies to improve interest rates across their own savings products over the past year – and some are offering returns of up to 6.2 percent.
Although average fixed-rate deals may have slightly decreased compared to the peak seen in the summer, savers seeking easy access accounts can still take advantage of some of the highest interest rates in decades.
Lucinda O’Brien, savings expert at Money.co.uk said: “Since the latest Base Rate announcement, interest rates on savings accounts remain fairly consistent week on week.”
Ms O’Brien said the “good news” for savers is that they can still find a savings account for more than six percent.
She added: “Top rates on cash ISAs are also remaining competitive with Moneybox offering its cash ISA at five percent. Plus, Coventry Building Society and Ulster Bank each have an easy access savings account at 5.2 percent.
“This means there are still deals available for people looking to earn some extra money on their hard-earned savings. It’s always a good idea to check what interest you are currently earning, and then compare savings accounts to see if you could get a better deal elsewhere.”
A variety of savings accounts are available to suit a range of needs – from easy access to cash ISAs – and Ms O’Brien has pulled together some of the top rates on offer today.
Easy access savings accounts
Easy access accounts allow savers to make payments and withdrawals with minimal restrictions and with small opening deposit requirements. These accounts are typically seen as a more flexible savings option.
Topping Ms O’Brien’s list of easy access savings accounts offering the highest interest rate is Coventry Building Society’s Triple Access Saver (Online) with an Annual Equivalent Rate (AER) of 5.2 percent on savings up to £250,000. The account can be opened with a minimum deposit of £1 and only three withdrawals are permitted without penalty. Interest can be paid monthly or annually.
Offering more flexible terms, Ulster Bank Loyalty Saver is also offering an AER of 5.2 percent on deposits of £5,000 and more. Interest is paid annually and withdrawals are permitted without charge.
Shawbrook Bank’s Easy Access (Issue 36) falls just behind an AER of 5.11 percent. A minimum deposit of £1,000 and interest is paid on the anniversary of opening. Up to £85,000 can be invested overall and withdrawals are permitted without penalty.
Fixed rate savings accounts
Fixed-rate accounts enable savers to lock in an interest rate for a set length of time but typically come with additional restrictions, such as a limit on withdrawals.
NS&I’s Guaranteed Growth Bond (Issue 72) has been topping the list for one year fixed savers for a few weeks now with an AER of 6.2 percent. Interest can be paid monthly or annually. The account can be opened with a minimum deposit of £500 and up to £1million can be invested overall. Withdrawals are not permitted until the end of the term.
Topping Ms O’Brien’s list for three year savers is JN Bank with an AER of 5.97 percent. The account can be opened with £1,000 and up to £100,000 can be invested. Interest is calculated annually and paid annually, and withdrawals are not permitted.
For longer-term savers, JN Bank is also offering the top rate with an AER of 5.8 percent. The account can be opened with £1,000 and up to £1,000 can be invested. Interest is paid annually and withdrawals are also not allowed until the term ends.
Cash ISAs
Cash ISAs enable savers’ money to grow without having to pay tax on the interest above the Personal Savings Allowance (PSA). Some ISAs can come with a few more restrictions, like penalty charges for early access.
For those who need instant access to their cash ISA, Moneybox’s Cash ISA tops the list with an AER of five percent for one year. The account can be opened with a minimum deposit of £500 and withdrawals can be made at any time.
For those looking for a fixed rate, UBL UK, Close Brothers Savings and Zopa are topping the lists for one, two and three-year accounts. UBL UK’s one-year fix offers an AER of 5.86 percent, while Charter Savings and Zopa offer AERs of 5.81 percent and 5.61 percent respectively.
