Which? Money provides its weekly look at the best savings deals currently available to help you deposit your cash in the right account.
Savers better off in top current accounts
If you want to put money away for a rainy day, you would automatically assume a savings account is the best place.
But with interest rates on savings accounts tumbling on a daily basis, you can now earn more interest on your cash in a current account.
Savers with £3,000 would be around £80 better off after a year if they put their money into a top-paying current account, instead of a Best Rate instant access savings account.
That £3,000 would earn £45.30 in Virgin Money’s Easy Access Saver account, paying 1.51%. But you would earn £125 in Nationwide’s FlexDirect Account, £120 in Clydesdale and Yorkshire Bank’s Current Account Direct, and £90 in Lloyds/TSB Classic Vantage or Santander 123 accounts.
Best current accounts if you stay in-credit
There are currently six current accounts offering a better rate of interest than the best instant access deals. However, these accounts do come with restrictions, so read the terms and conditions first.
Nationwide’s FlexDirect offers a market leading rate of 5%, but it applies only to balances of up to £2,500.
Clydesdale and Yorkshire Bank are next, paying 4% on balances up to £3,000.
Lloyd’s and TSB’s Classic Vantage accounts pays 3%, but only on balances of between £3,000 and £5,000.
Santander’s 123 account pays 3%, but only if you save between £3,000 and £20,000.
It’s worth considering shifting some savings into one of these accounts, but remember you may need to move it after a while to ensure you’re still getting the best deal as some of the rates above only apply for a limited period of time.
Find more Best Rate products
- Best Rate savings accounts – to find the best instant, notice and one to five-year fixed rate accounts.
- Best Rate cash Isas – to find the best tax-free instant, notice or fixed rate cash Isa deals.
- Best Rate credit cards – to find the best cards to suit your requirements.
- Top unsecured personal loans – for borrowing £10,000 over 5-years or £5,000 over 3-years.
And finally… boost your savings
To find out if your savings account is paying a competitive interest rate, check out the Which? Savings Rate Booster tool and switch your account for a better deal if necessary.