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What’s the best home for your savings?

Which? experts weigh up your options
man counting out coins

The new tax year is less than a month away, which means savers are running out of time to use their 2014/15 Isa allowance.

This time of year is commonly known as ‘Isa season’, as savings providers traditionally up their rates in a last-minute bid to attract customers before the new tax year starts on April 6. 

However, there is little sign of any attractive new Isa offers hitting the market so far – and with both current accounts and NS&I’s Pensioner Bonds currently offering better returns, it could be difficult to decide on the best home for your nest egg. 

Here, Which? Money looks at the best rate cash Isa, taxable savings and current account deals on the market to help you to find a suitable home for your money.

For the Best Rate cash Isas and savings accounts, we’ve also included a link to the Which? Money Compare tables where you can find out more details.

Best Rate cash Isas

This limit (£15,000 for the 2014-15 tax-year) for new Isas, or ‘Nisas’, can now be made up of cash, or stocks and shares, or a mixture of both. The limit increases to £15,240 from 6 April 2015.

Instant-access cash Isas 

Currently topping the best instant-access cash Isa tables are National Savings & Investments (NS&I) and Post Office Money, both paying 1.50%. However, it’s worth noting that the NS&I account doesn’t allow transfers in from other Isa providers. Click here to find out more about this Isa. 

Coventry Building Society and GE Capital Direct are next, both paying 1.40%.

Fixed-rate cash Isas

Julian Hodge Bank, United Bank UK and Virgin Money offer market-leading one-year fixed rate cash Isas, all paying 1.65%. The Virgin Money deal requires an initial investment of just £1 at account opening. You can find out more here. Post Office Money and Saga follow closely behind, both paying 1.55%.

Post Office Money currently tops the three-year fixed-rate cash Isa table, paying 2.10%. For more details about this Isa, click here. Deals from Aldermore Bank and Virgin Money aren’t far behind, both paying 2.00%. 

United Trust Bank currently leads the five-year fixed-rate cash Isa table, paying 2.75%. More information can be found here.

Which? Money Compare table: Fixed-term cash Isas – compare hundreds of deals

Best Rate savings accounts

If you’ve already used your tax-free Isa allowance for the 2014/15 tax-year, but you still have money to invest, you might want to consider an instant-access or fixed-rate savings deal. 

If you’re over 65, it’s certainly worth looking at NS&I’s Pensioner Bonds, which were introduced by the government in a bid to support older savers and went on sale in January. These bonds offer better rates than any similar savings product on the market, although interest is only paid upon maturity. 

Instant-access savings account

Currently topping the best rate instant-access savings account table is Saga, paying 1.35%. However, it’s worth noting that this account is only available to savers aged 50 or above. Click here to find out more about this savings account.

The AA, Bath Building Society, Kent Reliance, NS&I and Skipton Building Society are next, all paying 1.25%.

One-year fixed-rate savings account

NS&I’s 65+ Guaranteed Growth Bond offers a market-leading one-year fixed term interest rate, at 2.80%. This account is available to people aged over 65 and the deadline for applications is 15 May 2015. You can find out more here

United Bank UK and United Trust Bank follow closely behind with accounts available to savers of any age, both paying 1.75%.

Three-year fixed-rate savings account

NS&I’s 65+ Guaranteed Growth Bond offers a market-leading three-year fixed term interest rate, at 4.00%. This account is available to people aged over 65 and the deadline for applications is 15 May 2015. You can find out more here

For savers aged under 65, the best rates are from Close Brothers Savings and United Bank UK, paying 2.50% and 2.45% respectively.

Five-year fixed-rate savings account

Secure Trust Bank currently leads the five-year fixed-rate savings account table, paying 2.96%. More information can be found here.

Which? Money Compare table: Fixed-term savings accounts – compare hundreds of deals

Best Rate current accounts

With interest rates on savings accounts continuing to tumble, you can now earn more interest on your cash in a current account. 

Savers with between £3,000 and £20,000 can earn 3% gross in Santander’s 123 account. Nationwide and TSB are also offer a top-paying current account, both paying 5% on balances up to £2,500 and £2,000 respectively.

More on this… 

Which? Ltd is an Introducer Appointed Representative of Which? Financial Services Ltd, which is authorised and regulated by the Financial Conduct Authority. Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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