With the cost of living crisis gripping households, savers are looking for ways to make their money work harder. Fortunately, after years of low interest rates, high-yield savings accounts are gaining attention as the Bank of England maintains its interest rates at 5%. Here’s a rundown of the best savings accounts that offer returns above the current UK inflation rate of 2.2%.
High-Interest Fixed-Rate Accounts
For those willing to lock their money away for a set period, fixed-rate accounts offer some of the best returns:
GB Bank via Prosper: Offers a 5.30% fixed-rate account with a minimum deposit of £20,000 for a six-month term. Withdrawals are not permitted during this period, and the maximum investment is £85,000.
Mizrahi Tefahot Bank via Raisin: Provides a 5.15% fixed-rate account with a £1,000 minimum deposit for three months. The maximum deposit is also £85,000.
GB Bank via Prosper: Another option from GB Bank offers a 5.03% rate for six months with a lower minimum deposit of £1,000.
Top Easy-Access Savings Accounts
If you prefer flexibility with your savings, easy-access accounts allow you to withdraw funds anytime, though they usually offer lower interest rates:
Ulster Bank: Provides the highest rate for easy-access accounts at 5.20% with a £5,000 minimum deposit and no maximum limit.
West Brom Building Society: Offers 4.9% with monthly interest payments. A deposit of £1,000 is required, with an estimated balance of £1,049 after one year.
Oxbury: Provides a 4.87% rate, paying interest monthly, for those with a minimum £25,000 deposit. The account can be opened via an app.
Best Notice Savings Accounts
Notice savings accounts require you to give advance notice before withdrawing funds, typically ranging from 30 to 120 days:
Santander via Prosper: Offers a 365-day notice account at 5.50%, with a minimum deposit of £20,000 and a maximum of £250,000. A shorter 185-day notice account is also available at 5.34%.
DF Capital: Provides a 90-day notice account with a 5.30% interest rate. The minimum deposit is £1,000, and the account can be opened by phone, online, or email.
High-Interest Regular Savings Accounts
Regular savings accounts offer high returns for those who commit to saving a fixed amount each month:
Principality: Offers an 8% return on a six-month regular saver account. You must deposit up to £200 each month, with interest calculated daily and paid out after six months.
Yorkshire Building Society: Provides an 8% rate on its £50 Regular eSaver account. You can deposit up to £50 per month with a minimum opening deposit of £1.
Co-op Bank: Offers a 7% rate for existing customers, fixed for one year. You can save up to £250 per month and skip months without penalties.
Key Considerations
Fixed-Rate vs. Easy-Access: Fixed-rate accounts typically offer higher returns but require you to lock your money away for a set period. Easy-access accounts provide flexibility but with lower rates.
Notice Accounts: These accounts strike a balance between fixed-term and easy-access accounts by offering higher rates with a requirement to give notice before withdrawals.
Regular Savings: Regular savings accounts offer the highest rates but require a commitment to monthly deposits.
All the savings accounts mentioned are covered by the Financial Services Compensation Scheme (FSCS), protecting up to £85,000 per individual or double that for joint accounts.
As inflation continues to impact household finances, choosing the right savings account can help maximize returns and ensure your money grows more effectively.
