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How to find the best savings account

We round up the best savings rates on the market in 2021 and explain how to pick the right account for you. 

In this article
Which savings accounts can beat inflation? What are the best savings deals in 2021? Which are the best and worst savings providers?
Which? Recommended Providers for savings, 2020-21 How to find the best sustainable savings account

Which savings accounts can beat inflation?

Inflation rose to 3.1% in September 2021, down slightly from 3.2% the month before, according to the latest figures from the Office for National Statistics (ONS).

Below, we've listed the accounts paying the most interest on cash across instant-access, notice and fixed-rate deals at the time of publishing.

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

Regular savings accounts

The best regular savings accounts pay a higher interest rate than the current rate of inflation, but to access them you'll need to have a current account with the same provider.

In the past, these accounts have offered interest rates as high as 5% but these disappeared last year.

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 into a regular savings account: maximum monthly deposits are typically around £250.

What's more, the rates are sometimes 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 currently pays 2% AER on balances up to £1,500 for the first 12 months, generating a maximum return of £30. The rate will drop to 0.25% AER after that. You're also required to pay in at least £1,000 a month.

 

What are the best savings deals in 2021?

Instant-access savings accounts (unlimited withdrawals)

Excluding accounts with limited withdrawals or other restrictions, the best instant-access savings rate is 0.6% AER, offered by Charter Savings Bank, Leeds Building Society and Marcus by Goldman Sachs. The account from Marcus by Goldman Sachs includes a bonus rate of 0.1%, meaning the rate will fall to 0.5% AER after the first 12 months.

The next-best rate is 0.58% AER, offered by Investec Bank plc.

One-year fixed-rate savings accounts 

If you're willing to tie up your savings for a year, the best rate currently available is 1.51% EPR, from Gatehouse Bank.

The next-best rate is 1.45% EPR, from Al Rayan Bank.

The accounts from Al Rayan Bank and Gatehouse Bank are sharia-compliant products, and so offer an expected profit rate (EPR), as opposed to interest (AER).

Two-year fixed-rate savings accounts 

The best rate for a two-year account is 1.76% EPR, from Al Rayan Bank.

The next-best rate is 1.75% EPR from Gatehouse Bank.

The accounts from Al Rayan Bank and Gatehouse Bank are sharia-compliant products, and so offer an expected profit rate (EPR), as opposed to interest (AER).

Three-year fixed-rate savings accounts 

For a three-year term, the highest rate is 1.81% EPR/AER, from Al Rayan Bank and JN Bank.

The next-best rate 1.78% EPR, from Gatehouse Bank.

The accounts from Al Rayan Bank and Gatehouse Bank are sharia-compliant products, and so offer an expected profit rate (EPR), as opposed to interest (AER).

Four-year fixed-rate savings accounts

The best rate for a four-year account is currently 1.92% EPR, offered by Gatehouse Bank.

The next-best rate 1.9% AER, offered by JN Bank.

The account from Gatehouse Bank is a sharia-compliant product, and so offers an expected profit rate (EPR), as opposed to interest (AER).

Five-year fixed-rate savings accounts 

The best rate is 2.05% EPR, offered by Gatehouse Bank.

The next-highest rate is 2% AER, from JN Bank.

The account from Gatehouse Bank is a sharia-compliant product, and so offers an expected profit rate (EPR), as opposed to interest (AER).

Please note that minimum and maximum deposit amounts vary, even across products with the same rate, so make sure you consider the full details before you opt for a new account.

The links take you to Which? Money Compare, a comparison site for savings accounts offered by Which? Financial Services.

Which are the best and worst savings providers?

We know that customer service is an important factor for many people when choosing a savings account. But how do you find a bank or building society that combines great rates with top-notch customer service?

Which? is here to help. We've asked thousands of savers to rate their bank or building society, enabling us to create unique customer scores for all the major providers.

We've also analysed thousands of savings products and given each provider an overall product score, highlighting which companies offer consistently competitive rates. The full results from our 2020 analysis are as follows:

Best and worst savings providers

Which? Recommended Providers for savings, 2020-21

Each year, we name the very best savings providers as 'Which? Recommended Providers' (WRPs). To win this award, the bank or building society must:

  • achieve a customer score of 70% or above;
  • achieve an above-average product score;
  • offer a savings account which sits in the top 10 in at least one category and another account sitting within the top half of at least one category;
  • be fully covered by the UK Financial Services Compensation Scheme (FSCS); and
  • offer products which are available nationally and are not tied to the purchase of another product with the same provider.

This year, our WRPs are:

Principality Building Society

Leading the way this year with a top customer score of 75% is Principality Building Society. In an era of rock-bottom interest rates, Principality customers appreciated a respectable return on their savings, awarding four stars for this in our survey.

Aldermore

Maintaining its Which? Recommended Provider status for the second year in a row, Aldermore achieved five stars for customer service and also scored well for interest rates, clarity of statements and transparency of charges. 

Skipton Building Society

This building society has a stellar 81% product score, a strong 70% customer score and earned an impressive five stars out of five for its customer service.

About Which?'s savings account research

Scores and star ratings are based on a survey of 6,474 members of the general public in July 2020.

Which? Customer Score

This is Which?'s rating for customer satisfaction, based on feedback from real customers. The score is calculated based on customers' overall satisfaction with the brand, and how likely they are to recommend it to others.

Product score

We analyse nine key elements of savings accounts, from account management and restrictions to how often interest is paid, in order to calculate a product rating score. 

Providers must also offer an account sitting in the top 10 in at least one category of savings accounts and, if they offer more than one account, another product sitting within the top half of at least one category.

This ensures that the providers we endorse offer consistently good rates along with excellent customer service. 

How to find the best sustainable savings account

When you deposit money into a savings account, it doesn't just sit there until you're ready to withdraw it again.

Instead, it's put to use by your bank or building society, which will lend those deposits to fund things like mortgage loans, or use them to make investments. These could include fossil fuels, arms, or other industries you may disagree with.

If you're curious about what your money is being used for, or looking for a provider that matches your values, try the following:

If you're saving for more than five years, you could earn higher returns through investing. This also allows you to exercise more control over what your money is being used for.

Important note

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of the savings account provider before committing to any financial products.

Rates correct at time of publishing. Last updated 21 October 2021.

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