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Savings accounts
Interest rates up to 5.65% AER at Raisin UK
✓ Safe: All of our banks are FSCS protected (or the European equivalent)
✓ Competitive: Grow your savings quicker with high interest UK savings accounts
✓ Straightforward: No endless logins and paper application forms. Just a free, easy-to-use savings service
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Compare high interest savings accounts
- Financial wellbeing: Savings accounts are a great way to strengthen your finances and act as a rainy day fund or pension pot
- Competitive interest: Grow your savings more quickly by choosing an account with a competitive interest rate
- Risk-free: Savings accounts offered by banks in the UK include deposit protection of up to £85,000 per person, per banking group through the Financial Services Compensation Scheme (FSCS)
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November savings accounts update: what’s new?
Research from LiveMore has found that over a quarter (26 per cent) of people aged between 50 and 76 have been forced to postpone their retirement, while 23 per cent are considering delaying it, as the cost-of-living crisis continues to bite.
The good news is that savings rates are still high at the moment, and you can earn a competitive interest rate and enjoy the freedom to access your savings with a notice account from Raisin UK. Often viewed as the best of both worlds, our top notice account currently pays a competitive rate of 5.30% for a 95 day notice period – perfect if you want to earn a good rate without sacrificing access to your cash. For an even shorter term length, our top 35 day notice account is 4.40% AER.
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What is a savings account?
A savings account is an account you pay money into and earn interest from. It’s as simple as that. The critical thing to know is which type of savings account is best for you (more on that below).
Our co-founder, Kevin Mountford, has the following to say about savings, interest rates and how the financial climate affects your money.
“Our finances play a significant role in our day-to-day lives, influencing our wellbeing and how we plan for our future. Whether you’re saving for a house, sending your children to university, building your retirement fund or you want to grow your financial safety net in case of the unexpected, growing your savings pot helps to make a lot of things possible.”
With a wide range of savings accounts available, all with different terms, interest rates, and benefits, it can be difficult to know what type of savings account will help you maximise your money. On this page, you’ll find out more about the features and benefits of different types of savings accounts in the UK and how to choose the right savings account for you.
What are savings accounts for?
A savings account is not only a safe place to stow your money; it also helps you grow your finances. Your money will grow based on the account’s interest rate and how much you deposit.
As for what you save for, that can be absolutely anything. You might be thinking about saving for a house deposit, a new car, your retirement or even a once-in-a-lifetime holiday.
Saving for a house
Saving for a housing deposit is made so much easier when you opt for a savings account that suits you. You could even choose one that has restrictions on withdrawals to help you save, such as a notice savings account. If you’re buying a house with your partner, you might want to look at joint savings accounts so you can both save towards your shared goal. First-time buyers may also wish to consider a Lifetime ISA.
Saving for holiday
Whether you’re planning the trip of a lifetime or want to take the little ones somewhere special, having a savings account will help you stack up your spare cash. With lots of different types available, you’ll be able to find one that works for you. For example, fixed rate bonds can be a good option if you’re saving for an expensive once-in-a-lifetime holiday, while notice savings accounts may be suitable if you’re not sure when you’ll be going away.
Saving for retirement
With some advisers recommending that you save ten times the amount of your annual salary ready for retirement, the earlier you put into your pot, the better. As well as paying into a pension, you could consider growing a lump sum for retirement with fixed rate bonds. If you don’t intend to retire in the immediate future, putting your money into a fixed-rate savings account can be a good way to accrue interest over the long term.
Saving for children and grandchildren
Making the decision to have children is a huge step, and definitely one that you want to be financially ready for. Whether it’s your own children or grandchildren, having a savings account set up for them will help them in later life. Plus, most child savings accounts and Junior ISAs pay better interest rates than regular accounts.
Saving for your wedding
It’s called the big day for a reason, and with the average UK wedding costing nearly £20,000 in 2022, you’ll definitely want to take some of the financial stress out of wedding planning by having a pot ready. Depending on when you’re getting hitched, a long-term savings account such as a fixed rate bond may be a good option. Even if the big day is only a few months away, you might still benefit from putting your money into a notice savings account.
Tax-savvy savings
ISAs, or individual savings accounts, are great for those looking to save in a tax efficient way, as they let you save £20,000 without paying any tax on the interest you earn. It’s worth remembering, however, that many people won’t pay tax on their savings thanks to the personal savings allowance. That being said, ISAs can be a good option for those with a large amount of savings or additional rate taxpayers.
How do savings accounts work?
A savings account works by you opening and paying into an account. In return for choosing to bank with your provider, they will pay you interest based on how much you have in your account. How much interest you’ll receive also depends on the annual equivalent rate (AER) and the way the bank calculates interest.
The bank will then use your money to give loans to other people, charging them interest. Essentially, a bank takes money from one person and rewards them with interest in the form of a savings account, and lends money to others and charges them interest, in the form of a loan. Despite the bank using your money to provide loans, it is always available to you and protected by the Financial Services Compensation Scheme (FSCS).
Who can open a savings account?
Every savings account will have its own terms and conditions regarding who can open an account and with what amount, but you will usually have to be aged 18 or over to open a savings account in the UK. Unless you already have an account with the provider, you’ll probably need to provide some form of ID and proof of address.
If you’re under 18, you can open a children’s savings account or a Junior ISA. Parents or guardians can open an account on their child’s behalf – often with as little as £1 – but any money in the account belongs to the child.
Whether you’re opening a normal savings account or a child savings account, it’s important to do your research as savings rates can vary significantly between providers. There are plenty of comparison sites online or visit the table above to compare top saving accounts from our range of partner banks.
What types of savings accounts are there?
There are lots of different types of savings accounts available and finding the right one for your needs can feel daunting. In this section, we’ll talk you through some of the most popular savings accounts in the UK, including easy access savings accounts, fixed rate bonds and notice savings accounts.
Fixed rate bonds
You’re likely to earn the most interest with this type of savings account. However, you’re agreeing to ‘lock’ the money away until the end of a set term, so you won’t be able to withdraw any money until then. Fixed rate bond terms typically last for between six months and five years.
Easy access savings
This is one of the most flexible types of savings accounts. You can withdraw money whenever you want, whilst still keeping the easy access account open. However, they tend to pay lower interest rates than fixed rate bonds and notice savings accounts.
Notice accounts
You’re likely to earn a competitive rate of interest with this type of savings account. You can keep the money in the savings account for as long as you like, but you’ll have to give ‘notice’ when you want to withdraw your money. Notice periods are generally between 30 and 95 days, depending on the provider.
Could a fixed rate bond be right for me?
As you’ll be locking your money away for a set term, a fixed rate bond could be ideal if you have a long term savings goal and you know you definitely won’t need access to the money during this time. It could also be a good option if you’re looking for the most competitive rate of return on your money.
Could an easy access savings account be right for me?
An easy access savings account could be ideal if you’re looking for flexibility, and you want the freedom to make withdrawals and top up your savings as and when it suits you. It’s often a good option if you want to start an emergency fund, or you just want to put money away regularly whilst still earning a high street-beating rate of interest.
Could a notice account be right for me?
A notice account could be ideal if you’re looking to combine an element of flexibility with a competitive rate. It could be a good option for a medium term savings goal, or if you want the peace of mind that you can always access your money within a shorter period of time than a fixed rate bond.
How to choose the right savings account for you
Here’s some questions you can ask yourself to help you decide what type of savings account is right for you and your savings goals.
What are you saving for?
Deciding what your savings goals are can help you decide which savings account would suit you best. For example, if you’re saving for something specific, such as a new car or a trip abroad, an easy access account may be ideal as you’ll be able to withdraw your cash as and when you need to without a penalty, as well as being able to top up your balance whenever you want. For long term savings, such as a retirement fund, a fixed term savings account may be a better option.
Will you need access to the money immediately?
Savings accounts have different rules as to when – and how often – you can withdraw your money. Easy access accounts usually allow you to withdraw your money whenever you like without incurring a penalty, so they’re an ideal place to put your emergency savings. However, they do come with lower interest rates than fixed-rate savings accounts, and the interest rate can go up and down at any point. Fixed rate savings accounts, on the other hand, require you to lock your money away for a fixed period, with no access to your money within this time – but in return you’re likely to receive a higher interest rate. If you want the freedom to withdraw your cash but don’t need immediate access, a notice account may be a good option.
How much would you like to save?
How much you’re looking to save will affect what type of savings account suits you best. Regular savings accounts in the UK require you to deposit a set amount of money every month. If you don’t make the minimum payment into your account, your account may be closed or you may be given a lower interest rate. ISAs have a cap on the amount you can save each year (for the year 2022/23, the ISA cap is £20,000). FSCS protected savings accounts will cover your money up to £85,000 per person, per banking group (or £170,000 for joint savings accounts), so if you have more than this amount to deposit, it’s advisable to spread this money over more than one savings account to ensure you’re covered by the limit.
Which features are most important to you?
Savings accounts come with different features which may suit what you’re looking for. If you’re looking to get into the saving habit, a regular savings account requires you to deposit a set amount on a monthly basis. They also come with stricter rules than other savings accounts, like limited withdrawals across a period of time. If you want to be sure of how much interest you’ll earn, a fixed rate savings account could be a good option over a variable savings account. Other features may also be important to you, such as having a Sharia-compliant savings account, or banking with a ‘Green’ bank or building society.
Open a savings account with Raisin UK
UK savings rates vary considerably so it’s important to do your homework to ensure you’re getting the best deal for you. You can compare a range of top saving accounts with competitive interest rates in the table above. All of the accounts available through our partner banks are protected under the Financial Services Compensation Scheme (or European equivalent), so you can rest assured your deposit (up to £85,000 per individual, per institution) will be protected in the event the financial bank fails.
Once you’ve found an account that suits you, simply log in or register for a Raisin UK Account and follow the steps to apply for your chosen account. If you have any questions, our UK-based customer services team will be happy to help.
Savings Accounts FAQs
You can open an unlimited number of savings accounts, and it’s something worth considering. For example, you could open a fixed rate bond for long-term savings and have an emergency pot in an easy access account that you can dip into as and when you need to. You might also consider a notice account if you’re saving for a big holiday, a wedding or a house deposit.
FSCS-protected savings accounts will cover your money up to £85,000 per person, per banking group, so if you have more than this amount to deposit, it’s advisable to spread this money over more than one savings account to ensure you’re covered by the limit.
Depending on the type of savings account you choose, there are plenty that let you withdraw cash whenever you like.
You can open a savings account in a branch, over the phone, by post, online or via a banking app. To open a savings account with Raisin UK, simply log in or register for a Raisin UK account and follow the instructions.
You can close a savings account in a branch, over the phone, by post, online or via a banking app.
COVID-19 has impacted lives across the world, with the pandemic affecting people’s jobs, health and personal finances. Amid the chaos, people may be wondering if their money is safe in the bank, and the answer is “yes”.
The Financial Services Compensation Scheme (FSCS) covers all UK-regulated current or savings accounts and cash ISAs in banks, building societies and credit unions.
The FSCS is an independent FCA regulated fund set up by the UK-government. The scheme promises that in the event of a bank collapsing, no matter your age or where you currently live, you will get some of your money back, providing that the bank is registered and regulated in the UK.
The amount you can claim through this compensation scheme is limited. The FSCS currently states that if your bank fails, you can claim up to £85,000 per person, per financial institution (£170,000 for joint savings accounts).
The short answer is no. Because consumer credit reports don’t include savings accounts and no borrowing or debt is involved, savings accounts have no impact on your credit rating. Applying for and opening a savings account will not show up on your credit report, and neither will any deposits or withdrawals you make.
A credit rating or credit score is essentially a numerical expression based on your credit history which can determine your creditworthiness before a financial institution allows you to take on certain financial responsibilities.
Financial institutions develop your credit rating from consumer credit reports, considering any credit cards, loans (including Hire Purchase Agreements) and unpaid accounts or bankruptcy filings in your name.
The amount of money you should have in savings will depend on what it is you’re saving for. The recommended amount for common savings goals can be seen below:
Retirement – Advisors suggest ten times your annual salary. For example, if you earn £28,000 per year, you’d be encouraged to save £280,000 for retirement.
Wedding – The average UK wedding cost is around £20,000, which gives you a figure to work from depending on your budget and what you want from your special day.
House deposit – The larger the house deposit you put down, the less you’ll pay back in terms of your mortgage. Having a 15% deposit or more could help you secure the best bank rates.
The savings accounts that offer the highest rates of interest will differ and fluctuate in line with the Bank of England base rate, which is why it is well worth shopping around for your savings account. You may also want to consider a savings account with more restrictions, as these types of accounts typically offer higher interest rates as a reward, such as fixed rate bonds. You could also consider investing, although you do need to be aware of the increased risks involved.
One of the best ways to save for your children or grandchildren is to open a Junior ISA, which will allow you to save up to £9,000 a year tax-free for them. Alternatively, you could choose to invest in premium bonds, which you can sign over to the child when they turn 16, or you could open a children’s savings account.
As inflation rises, things get more expensive. This means your money has less buying power than it did before. Read more about how to protect your savings from inflation.
Yes, savings can affect your benefits if you have over a certain amount saved.
- If you have less than £6,000 in savings, you will be eligible for your full benefit amount
- If you have more than £6,000 saved, you will lose some of your benefit payment
If you have more than £16,000 in savings, you are not eligible for any means-tested benefits. Learn more about the savings and benefits rules.
In this article, you’ll learn whether easy access savings accounts might be a suitable option for you, what factors to consider when choosing an account, and how to find the best easy access account for your needs.
Read moreIn this article, you’ll learn how interest is earned on easy access accounts and why the rate may change. We also explain how to find the best easy access interest rates and help you understand the rules on tax and interest.
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