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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 November 2021? Which are the best and worst savings providers?
Which? Recommended Providers for savings, 2021-22 How to find the best sustainable savings account

Which savings accounts can beat inflation?

Inflation rose to 4.2% in October 2021, up from 3.1% 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.

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 November 2021?

Instant-access savings accounts (unlimited withdrawals)

Excluding accounts with limited withdrawals or other restrictions, the best instant-access savings rate is 0.71% AER, offered by Investec Bank plc.

The next-best rate is 0.7% AER, offered by Cynergy Bank. This rate will reduce to 0.3% AER after the first 12 months.

One-year fixed-rate savings accounts 

If you're willing to tie up your savings for a year, the best rate currently available is 1.37% AER, offered by Zopa.

The next-best rate is 1.36% AER, offered by Investec.

Two-year fixed-rate savings accounts 

The best rate for a two-year account is 1.63% AER, from United Trust Bank.

The next-best rate is 1.61% AER, offered by SmartSave and Zopa.

Three-year fixed-rate savings accounts 

For a three-year term, the highest rate is 1.87% AER, offered by United Trust Bank.

The next-best rate is 1.83% AER, from SmartSave.

Four-year fixed-rate savings accounts

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

The next-best rate 1.82% AER, offered by United Bank UK.

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 2.06% AER, from United Trust Bank.

The next-highest rate is 2.05% EPR/AER, offered by Gatehouse Bank and United Bank UK.

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.

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 2021 analysis are as follows:

Best and worst savings providers

Which? Recommended Providers for savings, 2021-22

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 66% or above;
  • achieve an above-average product score;
  • 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:

Coventry Building Society

Coventry Building Society achieved a customer score of 66%, with customers giving it high ratings for its customer service, application process, regular communications, and transparency of charges and penalties. Its online banking service also proved popular.

Among the savings accounts on offer, Coventry Building Society's instant-access saver pays 0.5% AER, but only allows you to access your cash six times a year. Its unrestricted instant-access cash Isa and savings account both pay 0.3% AER.

Elsewhere, its three-year fixed-term cash Isa and savings account both pay 1% AER.

Marcus by Goldman Sachs

Marcus by Goldman Sachs received a 68% customer score. Savers gave it top marks for its application process, clarity of statement and online banking service. The provider's transparency of fees and charges was also rated highly.

Marcus currently offers an instant-access savings account and cash Isa that both pay a competitive variable rate of 0.6% AER for the first 12 months; after that time the rate will drop to 0.5% AER.

About Which?'s savings account research

Scores and star ratings are based on a survey of 4,479 UK savings account holders in September 2021.

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 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:

  • Which? ratings: In July 2021 we rated 18 leading providers of savings accounts on their sustainable credentials. Find their scores here.
  • Provider websites: Look for the 'about us' page, which should discuss environmental issues, with the best listing what they currently invest in.
  • Environmental reports: Some providers publish dedicated reports about their emissions and target for reducing them.
  • Lending criteria: Sometimes called an ethical policy, this should show which industries the bank will and won't lend money to.
  • Annual reports: These often list emissions and other environmental impacts and plans to reduce these impacts.

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.

Rates correct at time of publishing. Last updated 2 December 2021.

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