Many Brits are trying to work towards a savings goal, and even if you aiming big or small, you want to get the most out of your cash pots and to do this, you will need to look for a good interest rate
If you want to make the most out of your savings then there are still accounts paying rates much higher than inflation.
Many Brits are trying to work towards a savings goal, and even if you aiming big or small, you want to get the most out of your cash pots. To do this, you will need to look for a good interest rate, which dictates how much the bank will pay you for holding your money with them.
However, it is also very important to remember that you may end up paying tax on the interest you make on your savings, depending on your income and how much you have in savings. This is called your Personal Savings Allowance.
The allowance for a 20% basic rate taxpayers is £1,000, and for a higher 40% rate taxpayers, the allowance is £500. Additional 45% rate taxpayers receive no tax break at all on savings. If you are not set to earn these amounts on your savings that you are good to look for the highest rate, if you are you may want to think about putting your money into an ISA.
Here is a roundup of the savings accounts which have the best interest rate for September 2024.
Easy-access savings
Easy-access accounts generally allow you to withdraw money whenever you need it, although you may find some accounts restrict how many withdrawals you can make in a year. You can also save as little or as much as you want each month making them very flexible.
- Ulster Bank (owned by NatWest) – 5.2% (variable) – need a minimum of £5,000 to get the highest rate and there is no max allowance, you will need an Ulster current account to open one
- West Brom Building Society – 4.9% (variable) – minimum £1 and a maximum allowance of £1million
Notice savings
Notice savings accounts are a type of savings account that requires you to notify your bank in advance of making a withdrawal and these can vary from 30 days to 180. In exchange for your patience, you’re typically rewarded with a more favourable interest rate compared to standard easy access savings accounts. You often face a penalty if you withdraw cash before your notice period.
- Investex – 5.25% for 90 days (variable) minimum £5,000 and a maximum of £250,000
- Vanquis Bank – 5.05% for 60 days or 5.3% for 60 days (variable) – minimum of £1,000 and a maximum of £250,000
- The Family Building Society – 5% for 35 days (variable) – can only deposit £10,000 exactly
Fixed-term accounts
With a fixed rate savings account, you lock away your savings for a set amount of time at a set interest rate. It’s also known as a fixed term bond. You can often find a variety of term lengths from six months to two years. It is also usually the case that the interest rate offered is more favourable for longer terms, though this can vary.
- Oxbury Bank – 5% for three months – need a minimum of £1,000 to £500,000
- Close Brothers – 4.92% for one year – need a minimum of £10,000 to open with a maximum of £2million
- Hampshire Trust Bank – 4.7% for two years – minimum of £1 and a maximum of £250,000
- Hampshire Trust Bank – 4.51% for three years – minimum of £1 with a maximum of £250,000
- Birmingham Bank – 4.36% for five years – minimum of £5,000 with a maximum of £250,000
Regular savings accounts
With a regular savings account, you commit to paying in a certain amount each month. In return, the bank or building society gives you a higher interest rate than you’d get with their current account or ordinary savings account. Like fixed term accounts these usually have longer terms such as 12 or 18 months.
Regular savers may be fixed, but they can also be variable meaning the interest rate can change. You also do not get the full interest payments if you do not make regular payments or withdraw from the account, although some regular savers allow you to withdraw up to a certain number.
- First Direct – 7% (fixed) – only available to First Direct bank account holders – max monthly payment: £300
- Co-operative Bank – 7% (variable) – only available to Co-Operative bank account holders – max monthly payment: £250
- Principality Building Society – 8% (fixed for six months) – open to all – max monthly payment: £200