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The best flexible savings and current accounts to keep your options open before Brexit

Find out how to top rates without committing to a fixed-term

Savers are increasingly opting for instant-access accounts that give them the option to withdraw their money, new data suggests – despite missing out on higher interest rates offered by fixed-term deals.

Figures from UK Finance show that people saved £643.3bn in high street bank instant-access accounts in January 2019, an increase of 2.5% since January 2017.

At the same time, £196bn was saved in fixed-rate accounts and those requiring notice, down 5.9% in two years.

The switch in savings habits could be down to Brexit uncertainty – some people are reluctant to lock away their cash before they know how it’s going to play out.

But that doesn’t mean your savings have to earn measly returns. Competition has been fierce in the instant-access market over recent months, while high interest current accounts could also offer an appealing return.

Here, we round-up the top rates, and see how much interest you could earn in a year.


What are the top-rate instant-access accounts?

The table below shows the five top-rate instant access savings accounts. The links take you through to Which? Money Compare.

Account AER Terms
The Family Building Society Premium Saver 1.51% £15,000 minimum initial deposit
Newbury Building Society Welcome to Newbury 1.50% £50 minimum initial deposit. Not available nationwide.
Marcus by Goldman Sachs online savings account 1.50% £1 minimum initial deposit. AER drops to 1.35% after 12 months
Cynergy Bank Online Easy Access Account 1.50% £1 minimum initial deposit. AER drops to 1.00% after 12 months.
Shawbrook Bank easy access 1.43% £1,000 minimum initial deposit.

Source: Which? Money Compare. Correct 8 March 2019

Many of the top instant-access accounts have reached a stalemate with rates, so it’s best to go for the one that best suits your circumstances.

The account from The Family Building Society requires a large minimum deposit, which many people will not be able to afford. However, with just 0.01% less interest, you can open three other accounts from just £50 – but make sure you’re aware of the caveats.

Newbury Building Society accounts are not available nationwide, so you’ll need to check that you’re eligible.

The Goldman Sachs and Cynergy Bank accounts both have one-year bonus periods. After the first 12 months the AER will drop, and you might need to switch to make sure you’re still getting a competitive rate.

You could also consider a cash Isa, which has the added benefit of being tax-free, and the interest you earn won’t go towards your personal savings allowance.

Coventry Building Society’s easy access Isa pays 1.50% AER – the only Isa to match any of the top-rate instant-access savings accounts. It can be opened with £1, but the interest rate will drop to 1.15% from 31 July 2020.

Can current accounts beat savings accounts?

The table below show the five top-rate high interest current accounts.

Account AER Terms
Nationwide FlexDirect account 5% AER paid on balances up to £2,500. Must pay in at least £1,000 a month. AER drops to 1% after 12 months.
TSB Classic Plus account 5% AER paid on balances up to £1,500. Must pay in at least £500 a month.
Bank of Scotland Classic Vantage account 1.5% AER paid on balances up to £5,000. Vantage must be added to your account. Must pay in at least £1,000 a month and pay out at least two direct debits.
Lloyds Bank Club Lloyds account 1.5% AER paid on balances up to £5,000. Must pay in at least £1,500 a month or pay a £3 fee. Must pay out at least two direct debits.
Santander 123 account 1.5% AER paid on balances up to £20,000. Must pay in at least £500 a month. Must pay out at least two direct debits. £5 monthly fee.

Correct 8 March 2019

Each of these accounts has quite different terms, so make sure you can commit to the minimum monthly deposit and direct debit requirement to qualify for the AER.

There’s little point in having a balance that exceeds the amount the AER is paid on – ie having more than £2,500 saving in Nationwide’s FlexDirect – as you won’t receive any interest on it. It’s best to keep an eye on your balance, and transfer any excess to a savings account, where that cash can grow.

Note that Santander’s 123 account also charges £5 a month. The others are all free, but you’ll be charged £3 for the Lloyds Bank Club Lloyds account if you don’t pay in the minimum monthly deposit.

Find out more: the best high-interest bank accounts

If you have £3,500 to save…

To see how the top-rate high interest current account would compare to the top-rate instant-access savings account, we’ve figured out how much interest you would earn over the course of a year with £3,500 to save.

The Nationwide FlexDirect current account

This account requires you to pay in £1,000 a month and the bonus interest rate only applies to the first £2,500.

Keep in mind that the bonus rate ends after 12 months, so you’ll need to find a new account with a better return at this stage.

Let’s assume you deposit £2,500 in the first month. Every following month, you deposit £1,000 at the beginning of the month, then withdraw it again – you could even deposit it into another high-interest current account to meet its deposit requirements.

You’ll still earn 5% AER on the full £2,500. Interest is paid monthly and is compounded, meaning your interest will also earn interest.

After a year, you’ll have a balance of £2,625 – so you’ve earned £125.

This is a good return but you could earn more by opting for a current account with a generous welcome bonus.

HSBC’s Advance Account, for instance, has a £175 welcome bonus if you apply via the Money Saving Expert site, or £150 if you go direct.

The Welcome to Newbury instant-access account

As The Family Building Society’s Premium Saver requires a minimum initial deposit of £15,000, it’s not an option for someone with £3,500 to save.

The next-best option is this Newbury Building Society account – except that the maximum amount you can save is £3,000. It’s available to ‘new savers’ who don’t have any other Newbury savings accounts, and ‘new mortgage customers’ who have completed with Newbury in the last 12 months, but don’t have any savings products.

What’s more, savers must live within the regional catchment area – it’s not available nationwide.

You’ll earn 1.50% AER on all your cash which, after a year, will leave you with £3,048, or a return of £48.

The interest is calculated daily, and paid annually on 31 October.

Find out more: how to find the best savings account

Instant-access vs current accounts

While our example shows that you could earn more in a year with a high interest current account, that’s not all you should consider.

High interest current accounts work well if:

  • You want to have your salary paid into that account to meet the minimum requirements – and earn enough to do so
  • You trust yourself not to spend the ‘savings’ in your current account, which will likely be used for all of your other day-to-day spending
  • You’re sure the interest you earn won’t exceed your personal savings allowance

Instant-access accounts work well if:

  • Your pay or amount you can save varies from month to month
  • You have a lot of money to deposit in one go, and want to earn interest on all of it
  • You want to keep your savings separate from the cash you spend – while still having access if you need it
  • You want to earn interest tax-free in an instant-access cash Isa

You can search through hundreds of savings and cash Isa accounts with Which? Money Compare.

Find out more: personal savings allowance and tax on savings interest

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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