Regardless of why you’re saving – for a house, a holiday, your children’s future or as a buffer to cover emergencies – you’ll want to make sure your money is working as hard as possible.
To help you get the most out of your savings, Telegraph Money has launched a range of “best buy” tables showing the highest rates available across a variety of savings accounts. These tables update automatically every day, with data provided by Savings Data Limited.
It’s more important than ever to make sure your savings are receiving a competitive rate. Conflict in the Middle East is expected to impact inflation rates in the UK as fuel prices have already risen, and food and energy prices are expected to spike in the coming months. Inflation in February measured 3pc, but you’ll want your savings to earn more than this to protect the value from being eroded by rising prices.
Our tables include the best cash Isa rates – whether you want an easy-access, notice, fixed-rate or variable rate account – and we also list the best Lifetime Isas if you’re saving for your first home or retirement.
If you have already maxed out your Isa, or want to save outside of the tax-free wrapper, we track the best easy-access accounts and interest-paying current accounts.
Those who prefer to save monthly should refer to the table of top-paying regular savings accounts, while savers happy to lock their money up for longer in pursuit of higher returns could benefit from our lists of the best fixed-rate bonds and notice accounts.
We also track the best Junior cash Isas and the best children’s savings accounts for parents putting money away for their family’s futures.
In this article, we will cover:
Why do rates matter?
Seeking out an account with a more competitive interest rate can make a huge difference.
For example, take a savings account paying a relatively low 0.75pc. A saver with £50,000 in this account will earn around £375 a year in interest. Moving the deposit to an account with a better rate can mean a difference of thousands. Take an account at the higher end offering 4.75pc – you’d yield £2,427 a year, an extra £2,052.
Cash loses value over time if it is left in an account that pays less than the inflation rate. At the current inflation rate of 3pc, a pot of £1,000 left in a zero-interest account would be worth just £970.87 after a year in real terms, and just £862.61 after five years. Our inflation calculator can show how your savings are affected.
What is a savings account?
Unlike a current account, which you’ll use to pay your bills and for everyday spending, a savings account is designed to be the place where you can stash your spare money away, where it will hopefully grow over time.
There are several different types of savings accounts – some offer variable rates, which can change at any time, while some require you to commit to locking your cash away for a fixed period.
In theory, the more inconvenient an account is, the more interest you should earn – but it’s not always the case.
Fixed-rate bonds tend to pay the highest rates on the market. Savers need to weigh up whether to take a fixed deal in order to get guaranteed interest for a longer term, or take a chance on a variable rate that could rise over the length of the term.