Best cash savings accounts: where to get the top rates of interest

Clare says

Lloyds offers a market-leading regular savings account for Club Lloyds current accountholder.

You can save between £25 and £250 every month for 12 months. After the 12 months are up your savings rate will change to a default variable one.

This account offers unlimited withdrawals, although keep in mind you might not be able to top up what you take out as there’s a monthly cap of £250.

Interest on your money is paid 12 months after you open the account.

Clare says

This is a regular savings account – which means it’s a type of account that rewards you for making regular, small deposits. You’ll often find excellent rates of interest on these accounts, but the downside is that you’re limited on how much you can pay in and therefore how much of that generous interest you can actually gain.

The other downside with this account is that interest is paid monthly, so you can’t gather interest on the maximum allowed £2,400 until the final month. In the first few months, you’re only earning interest on relatively small amounts as the total grows.

But if you’re looking for somewhere to put away a little of your income every month, this is a great way to build a pot. And, as there are no penalties for withdrawing, you can still get access to it any time you need it.

Clare says

Another Regular Saver account so there’s the chance to earn a high rate of interest, but you’ll be limited on how much you can save this way – in First Direct’s case it’s between £25 and £300 a month (so up to £3,600 per year).

And because you’re only receiving small amounts of interest at first while you build up the 12 month total, the most you can earn over a year is £136.50. That’s not to be sniffed at though for doing nothing!

So if you want to put a little bit away every month and can afford to leave it there (there are no withdrawals allowed before the 12 months is over with this account), this is a great option.

Clare says

Again, this is a Regular Saver account so you’ll only be able to limited sums into this account – in Co-Op’s case, £250 per month.

But that’s £3,114 per year that you can save (when you include the compounded interest) if you can afford to put £250 per month away.

Bear in mind that this isn’t a fixed rate, however, which means if the Bank of England changes the base rate, you might see the interest rate on your account change too.

Clare says

A very high rate of interest that’s guaranteed for one year on up to £480,000. It’s an FSCS-protected account so up to £120,000 per account-holder will be protected if the bank fails. (So, if you have a joint account, that’s double protection.)

You’ll need at least £1,000 to take advantage though, and your funds will be locked in for a year so make sure it’s not money you’re likely to need as you won’t be able to access it. And I don’t mean you’ll lose your interest rate if you access it – I mean you simply can’t get access to it before the 12 months is up.

Clare says

Cahoot’s Sunny Day account is a nice option for those looking to save no more than £3,000. For a very attractive 5.00% AER (variable) for 12 months, on up to £3,000 you’re getting an easy access account that allows you as many withdrawals as you like throughout the year.

You only need £1 to get started and can add more than the £3,000 (£2m is the max) but you’ll only get that stellar rate on £3,000. Anything over that earns zero interest – so don’t accidentally add too much.

This is a variable rate of interest though remember, so that rate isn’t locked down. It could go up or down and if it goes down, Cahoot gives a very generous 2 months’ notice, allowing you ample time to shop around for a better rate if needed.

Clare says

This is a superb rate – the highest we’ve seen in a long time – for this type of account. With a fixed interest account, the rate cannot be changed so you can work out in advance how much interest you’re guaranteed. And it’s a lot. If you were to deposit £50,000 into this account, you’d earn £14,853.97 by the end of the five years.

Of course, as with most accounts of this type, the trade-off is that you can’t get access to your money if you want it. And five years is a long time so you’ll need to be sure you really won’t need it during that time.

Clare says

I’ve included Cash ISAs in this list because there are benefits to using an ISA which are worth looking at. You can read more about them here.

A Cash ISA is a tax-free savings account. Under UK government rules, you can pay in up to £20k every year and all interest earned is tax-free. One thing to bear in mind, however, is that annual allowance is across all ISAs, so if you intend to open up a stocks and shares ISA in the same tax year, you’ll need to spread your allowance between the two.

Investing Insiders has partnered with Trading 212 to offer an unbeatable 5.01% AER (variable) includes a bonus of 1.41% for the first 12 months only for current tax year contributions. Cash ISA deal for new customers. You’ll need to sign up using our exclusive link and add the code INVESTUK when you sign up.

Trading 212’s Cash ISA is a If an ISA is flexible, you’re able to withdraw money and pay it back in, without it counting twice within your annual ISA allowance. It must be repaid within the same tax year it's withdrawn to be eligible, however.Flexible ISA and there are no penalties for accessing your cash at any time – meaning you can get to it any time you need.

T212’s £1 minimum deposit makes it a good match for those starting small. One thing to note, however, the bonus rate only applies to current tax year contributions and new customers.

Clare says

Oak North offers a very competitive 12-month fixed rate savings account. Although the current interest rate of 4.53% AER is beaten by other providers.

The account is free to open and you’ll just need to add a minimum deposit of £1 up to a maximum of £500,000.

It’s an easy-to-use and accessible provider which allows you to access your account online and via an app.

However, if you want to open a joint savings account you’ll only be able to do this using the website.

Customers rate Oak North very well and it currently holds an ‘Excellent’ score of 4.8 on Trust Pilot.

Clare says

Once you have a current account set up with Chase, you can also open a saver account. There is no minimum, and you can save up to £3 million in one of these accounts.

It currently pays 4.5% AER (variable) for 12 months (including a 2% AER fixed interest boost), and that interest is calculated daily, which is a good thing as it allows you to earn interest on your interest (what’s known as ‘compounding’) at a greater rate.

Clare says

Cynergy Bank offers a range of different savings accounts, many with highly competitive rates of interest. The highest rate available is attached to their 1 year Fixed Bond, currently: 4.75% AER AER.

If you’re wondering what a ‘fixed bond’ is – good question. It’s a type of savings account where you lock away a lump sum for a set term. Similar to any fixed rate savings account, but with a bond, access to funds is typically tighter.

As with all fixed interest products, you get the security of a guaranteed rate of interest for the duration of the term. However, with this bond, you cannot withdraw your money at all.

You get 14 days to fund your account, after that nothing can be added or removed. If you know you definitely won’t need that money, though, this is a great rate at a time when no-one seems very sure what is going to happen to interest rates in the coming months.

Clare says

A fixed rate gives you certainty, no matter what the Bank of England does to interest rates over the 12 months. Of course, the downside is that you can’t touch that money if you want to keep all the interest being offered here. (You can withdraw money from a Tembo Fixed Rate Cash ISA, but doing so will incur a charge equivalent to 90 days’ interest on the amount withdrawn.) Interest is calculated daily, which is good news for your balance, but it is only paid into your account at the end of the 12-months. So this isn’t the account for you if you think you might need that money in an emergency. Tembo does also offer an easy access Cash ISA which pays a decent [sc_TemboCashISA] – making that a better option if you want the option of unlimited, penalty-free withdrawals.

However, if you know you’re not going to need to access the cash, then this fixed account is a great way to bank a decent rate of interest and, of course, you can put up to £20,000 per year into a Cash ISA with zero tax to pay on any of your earnings.

Clare says

If you find it difficult to save regularly, Plum could take some of the hard work off your hands.

The app uses AI to analyse your spending habits and works out how much you can realistically afford to put aside, automatically moving money into your savings without you having to think about it.

You can also tweak the suggested amounts and choose how often money is transferred, so you’re always in control.

As well as helping you build your savings, Plum offers a range of accounts to suit different goals, including:

• easy access savings account
• Cash ISA
• Lifetime ISA
• Self-Invested Personal Pension (SIPP)

There are several Plum Plans to choose from.

Plum’s Basic plan is free to use, making it easy to see whether the platform suits your needs before paying for extra features.

If you decide you’d like more advanced tools, paid plans start from £3.99 per month, with Plus, Boost and Max memberships available.

Clare says

If you have a lump sum you’re comfortable locking away for 12 months, then a fixed interest account is worth considering. You get a guaranteed rate of interest, with none of the uncertainty that comes with a variable rate.

Generally, fixed rates are much less attractive than the headline-grabbing rates you’ll see on top-paying variable accounts (because the providers can always adjust those down if they wish). But this fixed rate is not too far behind some of the leading variable accounts, making it a strong contender. But, to cash-in, you must be sure you won’t need that money during the course of the term*. And you’ll need to have it all upfront as you can’t top this account up with additional deposits once the first 14 days have passed.

*Tandem does say they may make an exception in the case of financial hardship.

Clare says

You’ll need to open a Santander Edge current account to get access to this savings account and that comes with a price tag – £3 per month. There are other stipulations to maintaining an Edge current account, including needing to pay in at least £500 per month, so there are a few hoops to jump through.

The other main problem with this account is that there is a £4,000 maximum. Any savings over £4,000 will receive no interest at all.

But if you’re only saving small amounts, or you’re willing to split larger sums between this account and another provider, it’s worth looking into.