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Four ways to uncover hidden market-leading savings rates

The best rates may be found on limited-access accounts

Some of the most competitive easy access, cash Isa, regular savers and fixed-rate bonds don’t regularly appear at the top of comparison tables due to caveats – but if you qualify, these options can offer you some of the best rates available.

With inflation still at a record high, it’s important to hunt down the very best interest rate to stop your cash losing value in real terms.

Which? looks at 4 options that don’t regularly feature in the best-buy round-ups – from changing the deposit size when searching online to checking building societies for local offers.


Check your building society for better rates

Some building societies offer market-beating rates on cash Isas, regular Isas and Help to Buy Isas to savers in certain postcodes.

Hargreaves Lansdown found that savers living in areas like Ipswich, Stockport and Carlisle can earn nearly a third more in Isas through these restricted accounts compared to those available to everyone.

  Postcode- restricted  rate (AER) Postcode restrictions Best rate open to all (AER) % difference
Easy access cash Isa 1.6% – Ipswich Building Society Stepping Stone Isa (16-20)  IP – Ipswich
NR – Norwich
CO – Colchester
CM – Chelmsford
CB – Cambridge
PE – Peterborough
(also restricted to 16-20-year-olds)
1.16% – Leeds Building Society Limited Issue Online Access Isa (Issue 4) / Paragon Limited Edition Easy Access Cash Isa 0.44%
Regular saver Isa 1.7% – Vernon Building Society Regular Saver Isa  SK – Stockport
CW – Crewe
WA – Warrington
M – Manchester
WN – Wigan
OL – Oldham
BL – Bolton
HD – Huddersfield
1.5% – Furness Building Society Regular Saver Isa 1 0.2%
Help to Buy Isa 3% – Penrith Building Society Help to Buy Isa  CA – Carlisle
LA – Lancaster
 2.53% – Barclays Help to Buy Isa 0.47%

Source: Hargreaves Lansdown

Typically, big high street banks get cheap funding from the government, meaning they don’t need to be as competitive to attract money from savers.

But building societies are run for the benefit of members, which includes savers and borrowers, meaning they must balance the needs of both.

One strategy to ensure members get a good deal is to restrict who can open the account, either by limiting it to certain postcodes or by insisting accounts are opened in branch.

So if you are looking for a better rate, it can be worth checking out what your local building society has to offer.

Take advantage of existing customer deals

Banks and building societies often reward customer loyalty with exclusive access to products like savings accounts.

Newbury Building Society, for example, offers existing members a rate of 1.6% AER on its easy access savings account. The next-best rate open to all is from the RCI Bank Freedom Savings Account which pays 1.3%.

It’s also common for providers to make customer-only offers with regular savings accounts.

HSBC, Marks & Spencer Bank, Nationwide, First Direct and Santander offer current account customers a market leading rate of 5% AER, while the next best deal open to all is from Saffron Building Society, which pays 3.5%.

  Existing customer rate (AER) Best rate open to all (AER) % difference
Easy access 1.6% – Newbury Building Society Existing Members Account 1.3% – RCI Bank Freedom Savings Account 0.3%
Regular saver 5%  – HSBC, Marks & Spencer Bank, First Direct, Nationwide and Santander 3.5% – Saffron Building Society 12-month fixed Regular Saver (Issue 3) 1.5%

Source: Which? Money Compare

Tinker with the minimum deposit setting

When searching for a savings account on a comparison site, try adjusting the minimum deposit amount to see if a smaller or larger pot could get you a better deal.

Some savings accounts offer tiered levels of interest depending on how much you have to save, while others require a higher minimum deposit to open.

But savers may never see these rates, as most comparisons tables display accounts that require deposits of £1 or £100 as the default.

The Which? Money Compare tables allow you to change minimum deposit values to find the best rate for you. Here’s what we found when we put in £100, £1,000 or £25,000 when looking for a fixed-rate bond.

Best rate when searching minimum deposit £100 (AER) Best rate when searching minimum deposit £1,000 (AER) Best rate when searching minimum deposit £25,000 (AER)
One-year fixed-rate bond 1.9% – Atom Bank  Fixed Saver (£50) ) 1.9% – Atom Bank  Fixed Saver (£50) 1.9% – Atom Bank  Fixed Saver (£50)
Two-year fixed-rate bond 2.1%  – Atom Bank  Fixed Saver (£50) 2.1% – Atom Bank  Fixed Saver (£50) 2.1% – Atom Bank  Fixed Saver (£50)/ BLME Premier Deposit Account
Three-year fixed-rate bond 2.2% –  Atom Bank  Fixed Saver (£50) / NS&I Guaranteed Growth Bond 2.2% – Atom Bank  Fixed Saver (£50) 2.25% – The Access Bank  UK Sensible Savings Fixed Rate Bond (£5,000)
Four-year fixed-rate bond 1.86% – Leeds Building Society Income Bond 2.25% – Vanquis Bank Fixed Rate Bond 2.25% – Vanquis Bank Fixed Rate Bond (£1,000) / BLME Premier Deposit Account
Five-year fixed-rate bond 2.4% – Atom Bank Fixed Saver (£50) 2.43% – Secure Trust Bank Fixed Rate Bond 2.55% – BLME Premier Deposit Account

Source: Which? Money Compare

As you can see one-year and two-year deals are competitively priced for small deposits at the moment. But for longer-term fixes, you could benefit from changing your search to match your deposit size, as larger pots can secure a better deal.

Use a current account that pays interest

Some of the best rates on savings can be found with current accounts that pay interest, but you won’t find these deals in any savings Best Buy tables.

Using a current account as a savings account is a bit unconventional but it can boost your returns – providing you are prepared to jump through a few hoops.

Most current accounts require you to pay in a minimum amount each month, or set up a certain number of direct debits, in order to earn interest on your balance. You can see what’s on offer in the table below.

  In-credit interest rate  (AER) Min/max deposit Term Maximum number of accounts you can open Requirements
Nationwide FlexDirect 5% £1/£2,500 12 months Two (one must be joint) Credit £1,000 a month
TSB Classic Plus 3% £1/£1,500 Ongoing Two (one must be joint) Credit £500 a month
Tesco Bank Current Account 3% £1/£3,000 Until 1st April 2019 Two Credit £750 a month and have three active direct debits
Lloyds Bank Club Lloyds 2% £1/£5,000 Ongoing Two (one must be joint) Credit £1,500 a month and have  two active direct debits
Bank of Scotland Classic Account with Vantage 2% £1/£5,000 Ongoing Three Credit £1,000 a month and have two active direct debits
Santander 123 Current Account 1.5% £1/£20,000 Ongoing Two (one must be joint) Credit £500 a month and have two active direct debits

These accounts also restrict the balance you can earn interest on. But you can get around this by by opening up a joint account or in some cases another sole account.

Learn how to play the high-interest current account game in the video below.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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