In the current climate of low interest rates, you may be wondering how to find savings accounts with competitive interest rates that will maximise your savings. Our marketplace features fixed and variable rate savings accounts from a range of partner banks with some of the best savings interest rates in the UK.
View our FSCS or European Deposit Guarantee Scheme protected Fixed Rate Bonds below:
Bonus amount and availability dependent on eligibility and amount deposited into a savings product purchased through Raisin UK. Please read our bonus page to find out more.
** QIB UK and Gatehouse Bank savings accounts offer expected profit rather than interest as they follow Shari'a principles.
Table of Contents
- What is a savings account?
- Interest rates on savings accounts
- What types of savings accounts can earn the best interest rates?
- What are fixed rate bonds?
- What are notice accounts?
- Should you compare savings account interest rates?
- How is interest paid on savings accounts?
- How to decide which is the best savings account for you
- How many savings accounts can I have?
- Is my money protected in a savings account?
- Will I pay tax on my savings?
- Why a savings account from our marketplace might be right for you:
What is a savings account?
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, although there are different types of savings accounts to consider when choosing one that suits you (more on that below).
Interest rates on savings accounts
The Bank of England base rate is currently low, at just 0.1% (March 2020). That means it can be difficult to find high interest savings accounts that make your money work hard for you. Currently, some of the best savings interest rates in the UK are lump sum savings accounts that lock your money away to earn interest for a set period of time. You can view the top savings account rates in the table above. The most competitive lump sum account in our marketplace has an interest rate of 1.40% AER.
What types of savings accounts can earn the best interest rates?
Lump sum savings accounts, such as fixed rate bonds and notice accounts, typically feature the best savings interest rates.
What are fixed rate bonds?
Fixed rate bonds or fixed rate savings accounts offer guaranteed returns on your savings over a set term, typically between six months and five years. Interest rates on fixed rate bonds are often better than standard or easy access savings accounts and are usually more competitive the longer your term is. If you have a lump sum of money that you want to grow and can afford to lock away, fixed rate savings accounts might be right for you.
Example: ICICI Bank (UK) has an interest rate of at 1.00% AER fixed for two years with a minimum investment of £1,000.
What are notice accounts?
Notice accounts could be right for you if you want to grow a lump sum of money that you might need access to at a future date of your choosing. They allow you to make a withdrawal on a date you choose by giving your savings account provider notice, typically between 30 and 90 days, that you want to withdraw your money.
Example: ICICI Bank (UK) has an interest rate of at 1.60% AER variable for 95 days with a minimum investment of £1,000.
Should you compare savings account interest rates?
It’s important to do a savings account comparison to make sure you get the right type of account and the right interest rate for you. You can compare savings account rates on fixed rate bonds and notice accounts in the table above.
How is interest paid on savings accounts?
How interest is paid depends on your savings account, so it’s best to check the details to make sure you’re getting an account that’s right for you. It’s common for interest to be paid once a year, either on a pre-determined date or on your account opening anniversary. Some accounts pay out interest monthly, and some may pay quarterly. In the case of fixed rate bonds, interest may only be paid when your account matures, which could be up to five years.
The interest you earn can usually be paid into a bank account you nominate, or it can go straight back into your savings account.
How to decide which is the best savings account for you
The best savings account for you will depend on how much you have to deposit, whether you have a lump sum or want to save a smaller amount each month, how long you’re prepared to leave a lump sum untouched for and how you want your interest to be paid.
You can also choose to split your money by opening more than one type of savings account to get a mix of the benefits they provide.
How many savings accounts can I have?
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.
Is my money protected in a savings account?
With regulated UK banks, your money is protected up to £85,000, or £170,000 for joint accounts, by the Financial Services Compensation Scheme (FSCS) should your savings provider collapse. This amount is per banking group, so if you have over £85,000, you could open savings accounts with different providers to ensure it’s all protected.
All of the savings accounts in our UK marketplace include deposit protection, with accounts from UK banks providing FSCS protection. We only allow you to open savings accounts with up to £85,000, so you can be confident that your savings deposits are protected.
Will I pay tax on my savings?
Less than 5% of UK savers will pay interest on the savings they earn. Basic rate taxpayers can earn up to £1,000 per year tax-free. For higher rate (40%) taxpayers, it’s £500.
Why a savings account from our marketplace might be right for you:
- All of the savings accounts on our marketplace are free to open
- Your savings deposits are protected
- You’ll earn competitive interest rates
- You can choose from a range of savings accounts
- You could get higher interest rates from long term savings accounts
- You can easily manage your savings online
Open a savings account with Raisin UK
Quickly and easily open savings accounts with competitive interest rates from a range of UK banks by registering for a Raisin UK Account and logging in to apply today. It’s free to open an account, and once you’ve been approved, you just need to make your deposit and watch your savings grow.
If you have any further questions, including how to set up a savings account, our UK-based Customer Services Team will be happy to help.
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making money on your savings today.