Best Savings Accounts & Interest Rates In The UK
According to the latest Bank of England statistics, there are 132 banks incorporated in the UK with about another 159 incorporated outside of the country that are authorized to accept deposits through a UK branch. On top of this you have building societies, credit unions and investment firms. This means that there is healthy competition amongst these financial institutions to win over new customers and retain existing ones.
The best type of savings account
By far the most significant factor in persuading people to open a savings account is the level of interest they will earn. This can often result in banks offering introductory or bonus interest rates in order to attract new customers.
Therefore, identifying which bank is the best for savings accounts is difficult as there can be monthly fluctuation of rates, especially if the Bank of England makes a base rate change.
You also need to consider how long you are comfortable with leaving your money tied up for.
Instant savings accounts allow you to withdraw some or all of your money instantly but generally offer lower interest rates, which are variable.
Notice savings accounts will require a notice period, for example 30 days, before you can withdraw funds but may offer higher variable rates.
Fixed term savings accounts mean your money is tied up for a set amount of time, for example one, two or more years. However, these accounts generally offer the highest rates of interest and usually at a fixed rate.
PocketRate try to find the most competitive savings rates available for comparison together with a list of account features and opening requirements. You can compare savings accounts for free using the PocketRate tables.
Best savings accounts
There is a minimum deposit amount of £1,000 required to open this account but they do offer very competitive rates, which are fixed for the period. Interest is paid monthly or annually but you can’t close the account or make a withdrawal before the end of the term.
Unlike their Fixed Term offering, the Freedom account gives you easy access to your savings with unlimited withdrawals and no fees or notice periods. They offer a very competitive variable rate of interest and require £100 to open an account.
Although renowned for being the largest breakdown service in the UK, the AA also offer a range of savings accounts through Bank of Ireland (UK). Their Easy Saver account gives you instant access with free withdrawals and a decent variable interest rate that includes a fixed bonus rate for the first year. Existing AA members also get a slightly higher interest rate with their Member Saver account.
This notice account offers a very good variable rate of interest and you can open an account online with a minimum of £1,000. You can make an unlimited number of withdrawals giving the required 30 days notice.
As the name suggests, you get instant access to your funds without the need to give any notice period. The variable rate of interest is only slightly below that of their notice account so if you need to withdraw money quickly then this account could be a great option. You’ll need a minimum deposit of £1,000 to open an account.