Earning as high an interest rate as possible on your money is always the ideal situation, but it becomes even more important when inflation is running high, as it is in the UK right now.
Inflation rubs away your money’s spending power over time so you must earn at least that level just to stay where you are in buying terms - which right now is 3.6 per cent and expected to rise to 4 per cent across the rest of 2025.
Until recently, savers have had the opportunity to easily surpass that, but interest rate cuts have brought the Bank of England’s base rate down to 4 per cent, so it’s vital to search around for the best rates for your money. Luckily, we’ve done the hard lifting for you.
Here’s our round-up of the best savings accounts at present - though always remember to ask your bank or building society if they have even higher rates available, as some banks offer specific deals for regular savers only available to existing customers.
Rates are correct at the time of publishing, and all accounts mentioned are FSCS protected.
Cash ISAs
As a quick reminder, don’t think the name is scary - a cash ISA is just a normal savings account except you can put a maximum of £20,000 a year into your ISA products and you never pay any tax on them, no matter how much they earn you.
Right now the best interest rate
- Chip are offering 4.7 per cent but note this includes a bonus rate which stops after three months - then it’s 3.04 per cent.
- Trading 212 readers of The Independent can get 4.42 per cent using our unique code - the standard rate is 3.85 per cent. It’s a flexible ISA which includes a one-year bonus rate.
- Plum come in just under that at 4.41 per cent but it’s not a flexible ISA and you must note the limit of three withdrawals - any more and the rate drops to 3.04 per cent.
- Charter Savings Bank is offering 4.31 per cent. It’s not a flexible ISA and interest is paid monthly or annually as preferred.
- A host of alternatives are at or just under the 4.1 per cent mark including Tesco Bank and Virgin Money. Tembo are still offering 4.64 per cent on their website at the time of writing but that will be reduced to 4.1 per cent this week.
Easy access non-ISA
If you have either used up your ISA allowance or choose not to open one for any other reason, easy-access savings accounts are still offering competitive rates too.
- Chase offer 4.75 per cent for new clients, accessible if you open a current account with them and including a 12-month bonus.
- Cahoot, from Santander, offer a Simple Saver account which gives 4.55 per cent. Interest can be monthly or annually.
- Kent Reliance offer 4.41 per cent for a straightforward online savings, which can be for a sole user or a joint account.
- Coventry Building Society, Tesco Bank and others are offering 4.1 per cent or similar, some with restrictions.
Finally, make sure you always check with your current bank or building society to see if they offer a higher rate for existing customers - often there will be a regular saver for up to £250 or £300 a month with a better rate, though these are not necessarily easy access ones. Santander offer 6 per cent, first direct 7 per cent and so on.
Fixed term savings accounts
If you want to guarantee a better rate for a fixed period while interest rates go down, a fixed term account is the answer. Remember, you can’t usually access your money until the term ends and interest earned at the end all counts towards that tax year income, not split across two tax years if you take two-year bond term for example.
One year deals
- JN Bank is offering 4.43 per cent as the top one-year rate on the market.
- Atom Bank has a 4.36 per cent offering.
- Raisin with the National Bank of Egypt gives 4.25 per cent.
- Cahoot are at 4.2 per cent for theirs.
Two-year deals
- JN Bank lead the way at 4.45 per cent for two years too.
- Oxbury Bank are one of a handful offering around 4.4 per cent.
- RCI Bank offer 4.35 per cent for two and five year deals alike.
You can still get three-year or even longer deals offering above 4 per cent interest rates, but remember to consider tax implications as well as whether you’ll need your money by then.
If you are looking at an even longer deal, then depending on your circumstances and stage of life, it might be beneficial to strongly consider whether you’d be better off investing.
Notice accounts
In some peoples’ cases, you may want a mix of the above - you don’t think you’ll need the money but might want access just in case. Then, notice accounts might be a good option.
You generally can get a slightly higher interest rate on your money, but have to wait longer to withdraw it. Consider carefully therefore if they suit your needs.
- GB Bank are offering 4.58 per cent for a 120-day notice account.
- GB Bank also have a 4.5 per cent rate for 95-day notice.
- Kent Reliance have a 4.45 per cent account for 60-day notice limits.
Always check any bank account type suits your needs before opening one, in terms of access, limits, withdrawals and of course interest rate payouts.
