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How to find the best savings account

By Chiara Cavaglieri

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How to find the best savings account

We round up the best savings rates on the market and explain how to pick the right account for you. 

How to beat inflation

Despite inflation dropping to 2.6% in June, from 2.9% in May - it's still hard for savers to find an account that pays enough to protect their money from losing value in real terms.

Of the 750 savings accounts on the market that are without eligibility restrictions, not one can beat or match inflation. 

Here we round up the best accounts currently available.

The Which? Money Compare savings and Isa tables let you search hundreds of savings accounts from providers large and small to find a great account based on quality of service as well as cost and benefits.

Regular savings accounts

The best regular savings accounts pay rates that are high enough to outstrip inflation, but to access them, you'll need to have a current account with the same provider. First Direct, HSBC, M&S Bank, Nationwide and Santander all have regular savings accounts that pay a market-leading 5% AER for 12 months, but only existing current account customers are eligible.

Bear in mind that unlike fixed-rate bonds or instant-access accounts, which allow you to deposit a lump sum, you'll be much more restricted on the amounts you can pay in to a regular savings account- maximum monthly deposits range from £250 to £500. What's more, the rates are only payable for a limited time - typically 12 months.

Current accounts

Despite a series of rate cuts on popular interest-paying current accounts, many still offer meaningful returns, albeit only on small balances. You'll also need to make sure you pay in the required minimum monthly amount to qualify for interest.

Nationwide's FlexDirect account pays 5% AER on balances up to £2,500 for the first 12 months, generating a maximum return of £125. The rate will drop to 1% after that.

Tesco Bank's Current and TSB's Classic Plus accounts pay 3% AER on balances up to £3,000 and £1,500 respectively. What's more, Tesco Bank guarantees to pay 3% AER until 1 April 2019.

Savings account deals

Instant-access savings accounts (unlimited withdrawals)

Excluding accounts with limited withdrawals or other restrictions, the best instant-access savings rate in our tables is 1.25% AER, offered by Ulster Bank

Bank of Cyprus UK, Post Office Money and Tesco Bank offer the next best rates in our table, all paying 1.11% AER. 

One-year fixed-rate savings accounts 

If you’re willing to tie up your savings for a year, the best rate in our tables is 2.02% AER, offered by Al Rayan Bank. The advertised rate is the expected profit rate in accordance with Sharia law.

Paragon Bank offers the next best rate in our table, at 1.85% AER. 

Two-year fixed-rate savings accounts 

Al Rayan Bank offers the best two-year fixed-rate savings account in our table, paying 2.11% AER. The advertised rate is the expected profit rate in accordance with Sharia law.

Paragon Bank offers the next best rate in our table, paying 2.05% AER. 

Three-year fixed-rate savings accounts 

The newly launched three-year Guaranteed Growth Bond from NS&I pays a market-leading 2.2%, but the maximum deposit allowed is just £3,000.

NB our table ranks accounts based on a deposit of £5,000, so NS&I's bond doesn't show in the default view. You can change the deposit amount in the box on the left.

Al Rayan Bank offers the next best rate, at 2.16% AER. The advertised rate is the expected profit rate in accordance with Sharia law.

Four-year fixed-rate savings accounts 

OakNorth Bank offers the best rate in our four-year fixed-rate savings account table, paying 2.06% AER. 

Vanquis Bank offers the next best rate in our table, at 2.05% AER.

Five-year fixed-rate savings accounts 

The best rate on a five-year savings account available in our tables is 2.45% AER, offered by Paragon Bank..

Vanquis Bank offers the next best rate in our table, at 2.42% AER. 

Choose the right type of savings account

We know that customer service is an important factor for many consumers when choosing a savings account. That's why the Which? Money Compare comparison tables include our unique customer satisfaction ratings alongside each account. 

It's worth bearing in mind that a fair proportion of the best rate savings accounts are internet-only. If you've got your heart set on a branch-based account, then you will probably have to settle for a slightly lower interest rate.

  • Last updated: 20 July 2017
  • Updated by: Jo Langenhan

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