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Revealed: the best-rate savings accounts for small deposits

Find out where to put your money

While some of the best-rate savings products require deposits of more than £5,000, almost half of all people in the UK have savings of less than £2,000. So where can you get the best return on a small deposit? 

Results of a huge Financial Lives survey carried out by the Financial Conduct Authority (FCA) found that 13% of people have no cash savings at all, and a further 32% have savings between just £1 and £1,999.

But how can you expect to ever grow your savings if you have to settle for poor rates? Which? has looked into the banks giving savers with small deposits the best deals, and how you can turn your modest savings into a nest egg.


What size deposits do the best-rate accounts require?

The table below shows the savings and cash Isa accounts offering the highest rates for fixed-term and instant access accounts.

Of the 12 top-rated accounts, nine require an initial deposit of £1,000 or more – which may knock some savers out of the running.

Shawbrook Bank’s leading three-year Isa account requires £5,000 – a sum much of the population won’t have available, and certainly not to lock away for several years.

Two of the 12 are instant-access accounts – while they offer low AERs compared with the rest of the table, you can withdraw your cash whenever you might need it.

Atom Bank’s 1 Year Fixed Saver offers a fairly good rate of 2.05% but your money will be held for a year, so you’d have to be confident that you wouldn’t need to access your savings during that time.

What if I have less than £1,000 in savings?

Your best bet is likely to be instant-access savings accounts. There are 279 on the market that require a minimum deposit of less than £500 and, of these, 206 have a minimum deposit of £10 or less.

Those with small savings can still access the best rate on the market, offered by Post Office Money.

For fixed-term accounts, your saving options are slimmed down if you have less than £1,000 to put in the bank, with just 57 one-year fixed-term accounts that require a minimum deposit under £500.

While the top rate account from Atom Bank is open to anyone with more than £50 to save, there’s a steep jump down to the second-best available rate, with Saga offering 1.5% AER on balances over £1 in its 1 Year Fixed Rate Savings Account.

So, if Atom Bank withdraws its current 2.05% account, savers will struggle to find a comparable rate.

Longer term accounts are no different. There are 37 three-year fixed-rate options for those who can save £500 or less.

The best rate available comes from Atom Bank’s 3 Year Fixed Saver account, with 2.3% AER and just £50 required as a minimum deposit.

While this isn’t so far behind the leading rate of 2.35%, over time this could make a big difference to how much savers money can grow.

Which? Money Compare allows you look at hundreds of providers and compare savings accounts to find the best deal. You can also use the tool below to work which type of savings account might be best for you.

What else can I do to grow my savings?

High interest current accounts could be a great way to access some of the highest interest rates around, but they do come with some caveats.

The Nationwide FlexDirect account offers 5% AER on balances up to £2,500 for the first 12 months, which is great for those who don’t have much in the way of savings. However, you need to make sure at least £1,000 is paid in each month.

TSB’s Plus Account also offers 5% AER, but only on balances up to £1,500 as long as you pay in £500 a month and register for internet banking/paperless statements.

There’s 3% AER up for grabs with the Tesco Bank Current Account, where the interest is paid on balances up to £3,000. To qualify, you have to pay in at least £750 a month, and set up three direct debits from the account.

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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