After 14 consecutive Base Rate rises, banks and building societies have been improving interest rates across their own savings products – and some are offering returns of up to 6.2 percent.
While average fixed rate deals may have marginally dropped compared to the summer’s peak, savers looking for easy access accounts can benefit from some of the highest interest rates seen in decades.
Lucinda O’Brien, savings expert at Money.co.uk said: “Santander has caused a stir this week, with the reveal of its limited edition easy access saver and its market-leading interest rate of 5.2 percent. This surpasses Furness Building Society Triple Access Saver which has an interest rate of five percent.
“However, Santander’s offering is only available until September 17 – or until it’s sold out, which could be a lot sooner. To unlock this interest rate, you’ll need to open the account with a minimum deposit of £1 and have the interest earned annually rather than monthly.”
Ms O’Brien noted that the “good news” is that deposits and withdrawals are flexible, so it’s “ideal” for someone who wants to save but might need to access the money quickly.
She added: “So, with a high street bank raising its interest rates on easy access accounts, could this be a sign for others to follow suit? Only time will tell.”
A number of different savings accounts are available to suit a range of circumstances – 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 are typically more flexible, as these allow savers to make payments and withdrawals with minimal restrictions and with small opening deposit requirements.
Topping the leaderboard of easy access savings accounts offering the highest interest rate is Santander’s Easy Access Saver Limited Edition (Issue 3) with an Annual Equivalent Rate (AER) of 5.2 percent on savings up to £250,000 for 12 months. The account can be opened with a minimum deposit of £1 online, in-app, over the phone or in a branch, and interest is annually.
Furness Building Society Triple Access Saver (Issue 1) falls just behind with an AER of five percent on a minimum deposit of £1. Up to three withdrawals are permitted per year and up to £250,000 can be invested overall.
For those looking for a little more freedom to withdraw funds, Shawbrook Bank’s Easy Access (Issue 36) is offering an AER of 4.93 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 a few more restrictions to limit withdrawals.
NS&I’s Guaranteed Growth Bond (Issue 72) is currently topping the list for one-year fixed savers with an AER of 6.2 percent and 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 OakNorth Bank with an AER of 5.96 percent. The account can be opened with just £1 and up to £500,000 can be invested. Interest is compounded annually and paid on maturity, and withdrawals are not permitted.
For longer-term savers, Tandem Bank remains top of Ms O’Brien’s list for five-year bonds with an AER of 5.85 percent. The account can be opened with just £1 and up to £2.5million can be invested. Interest is paid annually and withdrawals are 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). However, some ISAs can come with a few more restrictions, like penalty charges for early access or transfers.
For those who need instant access to their cash ISA, Cynergy Bank Online ISA (Issue 41) tops the list with an AER of 4.55 percent. The account can be opened with a minimum deposit of £1 and withdrawals can be made at any time.
For those looking for a fixed rate, Shawbrook Bank, Charter Savings Bank and Zopa are topping the lists for one, two and three-year accounts. Shawbrook’s one-year fixed ISA offers an AER of 5.78 percent, while Charter Savings and Zopa offer AERs of 5.78 percent and 5.56 percent respectively.
