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Compare the Best UK Savings Accounts

Savings accounts allow you to earn interest on the money you save up. They can come with different features and pay a range of rates, so it’s important to choose one that’s right for you and your financial goals. You can use our charts below to compare savings accounts and find the best savings rates. You may also be interested in ISAs.  

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Depositor Protection

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme (FSCS) up to a maximum level of protection of £85,000 per person per institution. All new savings or bank accounts provided to UK customers are now covered by the FSCS.

Disclaimer

All rates subject to change without notice. Please check all rates and terms before investing or borrowing.

Types of savings accounts

There are several types of savings accounts that you can choose from, depending on your financial situation and savings goals.

Easy access savings accounts

Easy access savings accounts, sometimes known as instant access accounts, are the most flexible type of savings account. Many allow you to make as many deposits and withdrawals as you choose, without any restrictions, which can be useful if you want to be able to dip in and out of your savings.

However, bear in mind that some accounts, particularly those paying higher interest rates, may limit the number of withdrawals you can make. Also, these accounts pay a variable rate of interest, which means the rate could change at short notice.

Fixed rate bonds

Fixed rate bonds typically pay higher rates than easy access accounts as you agree to lock your money away for a specified period. The rate is guaranteed for the duration of the fixed term.

You will usually only be able to deposit into the account for a limited period after opening and won’t normally be able to access your savings until the end of the term. Fixed rate bonds offer terms ranging from several months to several years.

Notice accounts

Notice accounts are like a halfway house between easy access and fixed rate savings. You will often be able to add to these accounts without restriction but, when you want to withdraw any money, you will need to wait until the end of the specified notice period. Notice periods can typically range from 30 days up to six months.

Regular savings accounts

If you don’t have a lump sum to put into savings but instead want to deposit a sum of money into a savings account every month, regular savings accounts may be worth considering. These accounts typically require you to deposit a minimum amount each month and may set restrictions on withdrawals. Because of the conditions related to these accounts, regular savings accounts can often pay relatively high rates.

Children’s savings accounts

Children and teenagers aged under 18 will find there are specific children’s savings accounts available. They may come with certain age limits and allow parents or guardians to manage the account until the child reaches a certain age. There are easy access and fixed accounts available.

Do I need a savings account?

Although you don’t need a savings account by law, most people will find them a useful way to manage their finances, build up their savings and earn interest on their money.

Savings accounts allow you to separate money that you’re putting aside for the future from your day-to-day spending money that you need for bills and shopping, for example.

If you use your current account for your savings, you may be tempted to spend this money instead of keeping it saved for emergencies, a house deposit, a holiday or any other goals. Furthermore, you would miss out on the higher rates of interest that savings accounts can offer.

Even if you don’t have a large sum to put into savings at the moment, opening a savings account and getting into a habit of making regular deposits can help to improve your financial stability. By building up your savings, you give yourself a financial cushion if your income drops or if you’re faced with an emergency expense, such as a car repair, which means you may be less likely to turn to expensive forms of borrowing to cover these costs.

Pros and cons of savings accounts

  • Savings accounts pay interest so you can get a better return on your money than if it was in a current account.
  • Money in a savings account should be protected by the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 that you hold with each provider (or banking group) should it go bust.
  • They can encourage you to start and develop a regular savings habit.
  • Building up a decent sum in savings can help you if you need to cover an emergency expense or large purchase in the future.
  • If you lock your money away in a fixed bond, you won’t be able to access it if you need it for an unexpected expense.
  • Interest rates on easy access accounts can go down, so the return on your money could be smaller than initially thought.
  • If you’re currently paying off expensive debt, such as credit card debt, it may make more sense to pay this off instead of putting the equivalent sum in savings.
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How to choose the best savings account

When comparing savings accounts and deciding which one is right for you, there are several points to consider.

  • What is the interest rate? This will be one of the most important factors for most savers. The higher the interest rate, the greater return you can get on your savings.
  • Do you need access to your money? There are different types of savings accounts available depending on whether you want to be able to dip into your savings or not. For example, easy access accounts may be suitable for an emergency fund, while a fixed bond may be more suitable for your longer-term savings goals.
  • Do you want to deposit a lump sum or make regular deposits? While some accounts may allow you to deposit as much and as often as you like, other accounts set certain restrictions and conditions. It’s also worth checking the minimum opening deposit that is required to open an account.
  • How do you want to manage your account? Providers offer different methods of managing their accounts, with some only available via mobile app while others give you the option of visiting a branch, for example.
  • How do you want the interest paid? Some accounts pay interest monthly, which could be appealing for those wanting to supplement their income, while other accounts may pay yearly, for example.
  • Do you want an ethical savings account? Some savings accounts and providers highlight their green or ethical credentials, which may be important for some savers. Similarly, there are Shari’ah compliant savings accounts on the market which pay an expected profit rate, instead of an interest rate like traditional savings accounts.
  • Are you eligible for the account? Some savings accounts are only available to existing customers (such as those who hold a current account with the provider), while others may only be available to those living in certain postcodes or who meet certain criteria, for example.

 

How do I open a savings account?

It should be fairly straightforward to open a savings account. Depending on the account you choose, you may be able to open it online, by mobile app, in a branch or over the phone, for example.

You will usually need to provide some personal details, including your full name, date of birth and address history, when opening a savings account. You may also need to show some proof of ID, such as a driving licence, so the provider can verify your identity.

These identity checks don’t involve any credit checks and won’t affect your credit score.

You may also need to provide other information during the application process, such as details of another bank or building society account that will be “linked” to the savings account for deposit and withdrawals, for example.

Once you’ve provided all the necessary details, you will usually need to deposit a minimum sum to open the account. This could be as little as £1 or as much as £10,000 or more.

Bear in mind that many providers require you to be a UK resident and to confirm that the UK is your only country of residence for tax purposes.

Savings accounts FAQs

How many savings accounts can I have?

There’s no limit to the number of savings accounts you can have. You may like to have a mixture of accounts, such as an easy access account for any emergency expenses and one or more fixed bonds for your longer-term savings.

What is the interest rate on a savings account?

The interest rate on a savings account tells you how much of a return you can get on your savings. To help you compare accounts, the interest rate is displayed as an annual equivalent rate (AER), which tells you how much you could earn over the course of one year including any compounding interest or bonuses, for example.

Are savings accounts safe?

All savings providers should be regulated by the Financial Conduct Authority (FCA) and, under the Financial Services Compensation Scheme (FSCS), up to £85,000 of the money you have saved with a provider is protected if it goes bust. Bear in mind that if one or more providers share a banking licence, this limit applies to your total deposits with these providers.

What is the difference between a savings account and ISA?

Savings accounts and individual savings accounts (ISAs) are both places where you can build up your savings. The main difference between them is that any interest you earn on a savings account above your Personal Savings Allowance (PSA) is taxable, whereas any interest you earn on an ISA is completely tax-free. Read more on the differences between savings accounts and ISAs.

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Rhiannon Philps

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