How to find the best savings account
By Chiara Cavaglieri
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
With inflation at 3.1%, it's 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.
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 table is 1.3% AER, offered by the Post Office and RCI Bank UK. RCI is not covered by the UK Financial Services Compensation Scheme, but all accounts are covered by the French Deposit Guarantee Scheme, protecting the first 100,000 Euros.
Bank of Cyprus UK and The Nottingham Building Society offer the next best rates in our table, both paying 1.25% 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 1.86% AER, offered by Al Rayan Bank. Al Rayan Bank do not offer you interest, instead it makes Sharia compliant investments on your behalf to achieve expected profit rates.
Milestone Savings offers the next best rate in our table, at 1.82% AER. Milestone Savings do not offer you interest, instead it makes Sharia compliant investments on your behalf to achieve expected profit rates.
Two-year fixed-rate savings accounts
Axis Bank UK offers the next best rate in our table, at 2.04% AER.
Three-year fixed-rate savings accounts
The Access Bank UK offer the best rate in our three-year fixed-rate savings account table, at 2.25% AER.
Charter Savings Bank offers the next best rate in our table, at 2.21% AER.
Four-year fixed-rate savings accounts
Masthaven Bank offers the best rate in our four-year fixed-rate savings account table, at 2.22% AER.
Ikano Bank offers the next best rate in our table, paying 2.21% AER. Ikano Bank is not covered by the UK Financial Services Compensation Scheme, but all accounts are covered by the Swedish Deposit Insurance Scheme, protecting the first £85,000.
Five-year fixed-rate savings accounts
The best rate on a five-year savings account available in our tables is 2.5% AER, and is offered by Paragon Bank.
PCF Bank offers the next best rate in our table, at 2.42% AER.
The best and worst savings providers for customer satisfaction
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.
You can also see the scores, and Which? Recommended savings Providers below.
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.
|Best and worst savings providers|
|Provider||Customer service||Rates of interest||Regular communication||Transparency of charges/penalties||Product Score||Customer Score|
|Al Rayan Bank||n/a||56%||75%|
|Charter Savings Bank||n/a||n/a||n/a||58%||75%|
|RCI Bank UK||n/a||n/a||68%||72%|
|West Brom BS||n/a||68%||69%|
|Bank of Scotland||73%||56%|
|National Savings and Investments (NS&I)||58%||55%|
|Post Office Money||65%||53%|
|Royal Bank of Scotland||88%||52%|
|ICICI Bank UK||n/a||n/a||68%||51%|
We’ve also looked at the main elements of an instant-access savings account and have introduced a scoring system as a way of comparing each account on an equal basis. For a provider to be eligible for WRP status, it must achieve an average or above score for its instant-access savings account (currently 69%).
Which? Recommended savings account providers
|Average score of all savings account providers rated by Which? Money||59%|
|Skipton BS||Offers competitive rates on its one-year, two-year, three-year and five-year fixed rate cash Isas||
|Principality BS||Offers competitive rates on its internet-only ordinary instant access savings account and instant access cash Isa||
|Metro Bank||Offers competitive fixed-rate cash Isas. Its branches are open 7 days a week (8am to 8pm Mon-Fri, 8am to 6pm Sat and 11am to 5pm Sun).||
|Coventry BS||Offers competitive rates on its ordinary instant access savings account and instant access cash Isa||
Choose the right type of savings account
- Last updated: 12 January 2018
- Updated by: Jo Langenhan