Best savings rates this week

Last updated: Feb 3rd, 2016
First published: Fri, 15/10/2010 - 09:04
Feature by Tom Wilson

In this article, Moneywise reviews regular, children's savings, fixed-rate and instant-access accounts with the best savings rates currently on the market.

Remember, these rates are before tax, but from next year most people will be able to earn £1,000 interest from savings tax-free (depending on your income tax rate). In any case, if you haven't used your cash Isa allowance this tax year, getting an Isa should be your first port of call. See our round-up of the best cash Isa rates.

Find the best Cash Isa or savings account for you

INSTANT ACCESS

If you're looking for an account where you can access your money quickly, then a no-notice deal is a good idea.

Just remember, the interest rate on these accounts is variable so it could decrease down the line.

Also, watch out for sneaky terms and conditions - not all instant access accounts offer unlimited withdrawals, so shop carefully. 

  • RCI Bank's Freedoms Savings Account offers 1.65% AER on a £100 minimum deposit. Accounts must be managed online, with a £1,000,000 maximum balance. This account is covered by the French, rather than UK deposit protection scheme, so savings of up to €100,000 are guaranteed, rather than £75,000. 
  • Shawbrook Bank pays 1.45% AER on balances between £1,000 and £50,000. It's available by post or online, and you can opt for monthly or annual interest. 
  • Virgin Money’s Defined Access Saver (Issue 4) pays 1.41% AER on balances between £1 and £250,000. However, if you make four or withdrawals in a year the interest rate drops to 0.75%. The account is available in branch, by post, by phone or online. 

 

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NOTICE ACCOUNTS

If you are happy to wait a little while before accessing your savings, rates on notice accounts tend to be higher than instant access savings. Some won't allow early access at all, though others may let you withdraw without notice, subject to losing some interest. 

 

FIXED RATE

Fixed-rate savings accounts are normally aimed at people with a lump sum that they wish to lock away for a pre-agreed period of time.

Interest is fixed so your return is guaranteed, unlike instant access and notice accounts, which tend to be variable. However, do bear in mind that withdrawals and further deposits are rarely allowed.

SHORT TERM

One year/18 months:

  • RCI's 1 Year Fixed Rate Bond offers 2.06% AER on a minimum opening balance of £1,000, up to £1,000,000. The account must be managed online and no early access is allowed. Again RCI is licenced by the French regulator, so savings worth up to €100,000 are protected, rather than £75,000.
  • Fidor Savings Bank pays 2% AER on its online-only one year bond on deposits between £100 and £100,000. Note your savings aren't guaranteed by the Financial Services Compensation Scheme - instead it's covered by the German equivalent, which means deposits of up to €100,000 are protected.
  • Punjab National Bank offers 2% AER for people depositing between £500 and £2,500,000. Accounts can be opened in branch or by post. Punjab National Bank is licened by the FCA, so deposits are protected by the Financial Services Compensation Scheme (FSCS). 

 

Two year:

  • Fidor Savings Bank pays 2.4% AER over two years on its online-only fixed rate bond. You can save between £100 and £100,000. This account is also covered by the German, rather than UK, savings protection scheme.
  • RCI Bank 2 Year Fixed Term Account pays 2.35% AER on balances between £1,000 and £1,000,000. It’s online only, and covered by the French deposit protection scheme, so up to €100,000 is guaranteed, rather than £75,000.
  • Punjab National Bank's 2 Year Fixed Term Account pays 2.3% AER on balances between £500 and £2,500,000. It's available in branch or by post. 

 

MEDIUM TERM (THREE AND FOUR YEAR)

  • Turkish Bank UK’s 3 Year Bond pays 2.75% AER, on balances between £5,000 and £250,000. It’s available by post, online or by phone. Though you may not be familiar with the bank, it’s fully licened by the UK regulator, so covered by the FSCS.
  • Fidor Bank's 36 Month Savings Bond pays 2.75% AER, and comes with the same terms and caveats apply as the two-year offering, so beware it’s covered by the German, rather than UK, savings protection scheme. 
  • RCI Bank’s 3 Year Fixed Rate account pays 2.7% AER on balances between £1,000 and £1,000,000. You’ll have to apply online. 

 

LONG TERM (FIVE YEAR)

 

REGULAR SAVINGS

The current economic backdrop has not only highlighted the importance of saving, but means more people would like to do it little and often.

  • First Direct Regular Saver pays 6% AER on deposits between £25 and £300 per month. The rate is fixed for 12 months and is only available to existing customers.
  • M&S Bank’s Monthly Saver offers 6% AER on deposits between £25 and £300 to its current account holders. The interest is paid annually, and the rate is fixed for 12 months. After this, the money will either be transferred to your current account or transferred to the everyday savings account, which pays 0.35% AER so you’ll need to make a note in your diary to switch in a year.
  • The TSB Monthly Saver returns 5% AER on monthly deposits between £25 and £250. The rate is fixed for 12 months and withdrawals have to be paid into a TSB current account, so you’ll need to bank with it already. Unlike M&S Bank and First Direct, TSB offer instant access to your savings without penalty.  

 

CHILDREN'S SAVINGS ACCOUNTS

  • Halifax Kids Regular Saver offers a market-leading 6% AER 12-month bond. You can deposit between £10 and £100 in the account each month.  
  • Saffron Building Society pays 4% AER on its instant-access children’s account. It’s available in branch or by post. The account can be held until the child is 15, at which point the money gets transferred to an account paying 0.5% AER, so remember to make a note to switch.
  • Dudley Building Society’s Junior Easy Saver pays 3.5% AER on balances over £10, up to the age of 15. At this point, you’ll be transferred to the instant-access Junior Saver, which pays 1.75% AER.

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