UK Savings Week: 7 questions to ask before opening an account

UK Savings Week, an annual event started by the Building Societies Association, runs from 22 to 28 September 2025. It aims to raise awareness of the importance of saving, and it's now more important than ever to review your nest egg. 

Which? analysis found less than half of accounts offer rates that beat inflation, meaning savings held in one of these products are effectively losing value over time. Yet a new Skipton Building Society survey shows that 39% of savers rarely or never move their funds, with 21% of these respondents believing it's too complicated. 

To ensure your money is working as hard as possible, here are seven questions you should ask when choosing a savings account.

1. Is the rate competitive?

This one is a no-brainer, really. Despite rates steadily falling over the past couple of years, you can still grab a top deal of up to 5% AER.

At the very least, you should pick a savings account with an interest rate above the current inflation figure of 3.8%. Our latest analysis found the proportion of accounts that can beat inflation is dwindling fast, dropping from 80% in January to just 48% today.

The closer your savings rate is to the rate of inflation, the less value your cash will lose over time. That's why you should ensure that your money is getting the best interest rate possible – even when savings account rates are comparatively low.  

This table shows the top instant-access and fixed-rate savings accounts, ordered by term.

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2. Instant or fixed?

With so many types of account to choose from, it can be difficult to decide which deal is best for you. But it usually boils down to two important questions: how likely are you to need access to your money, and for how long are you prepared to lock it away?

Instant-access products are great for savers who want to withdraw money whenever they want and don't have a huge lump sum to open an account with. However, rates tend to be much lower than fixed bonds - and because the rate is variable, they can go up or down at any time.

On the other hand, locking your money away for a year or more could help to protect it if savings rates continue to fall, as fixed-term accounts guarantee your rate won’t drop during the term.

It might suit your circumstances to have one type of account or a variety with different terms and access. Just always check the small print before opening an account, to see what sort of hit you might have to take if your situation changes.

• Find out more: best savings accounts

3. Is it a boosted deal?

Sometimes, the advertised interest includes a 'bonus' rate that expires after a set period of time.

For example, Chase's Saver with Boosted Rate offers 4.75% AER, but that includes a bonus rate of 2.25%, fixed for 12 months. Once the year is up, you'll only get the standard rate, which is currently set at 2.5% AER.  

The main risk with this type of deal is that if you don't keep track and switch when the bonus ends, you could end up earning far less interest than you might get elsewhere. 

Don’t forget, the overall rate could still change before the bonus expires — the standard rate is variable, and the provider can change it at any time.

4. When is interest paid?

Some accounts offer to pay interest monthly rather than annually, and when you come to open the account you'll usually be given the choice between having the interest paid either into your nominated current account or added to existing funds in your nest egg. 

If you choose the former, you won't benefit from compounding (when the interest that's paid into your pot accrues interest on itself over time, meaning your savings grow more quickly) and will mean you earn a slightly lower gross rate. 

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5. Does the size of your pot matter?

Most savings accounts ask for a minimum opening deposit. Fixed-rate accounts usually require a bigger lump sum than instant-access products. For example, Moneyfacts data shows that eight of the top 10 instant-access accounts on 17 September can be opened with £100 or less, compared to four of the best fixed-rate accounts. 

Savers who want to tuck away smaller amounts should also check the maximum deposit limit.

Cahoot's Sunny Day Saver, which has topped the charts for months with its 5% rate, is easy to open and available to all. But there’s a catch: interest is only paid on balances up to £3,000 – anything above that earns nothing.

6. Is how often you save important?

Regular savers are another type of account aimed at people who only have a small amount to tuck away each month – typically between £250 and £500. 

In return, these accounts offer interest rates far higher than most other types of savings product. Zopa's top one-year account, for example, pays an impressive 7% AER. But there is a catch. 

Even with high rates, the total interest earned can be less than you might imagine, because you build the balance gradually over the year.

For example, saving £300 a month for 12 months at 7% might suggest £264 in interest on £3,600. In reality, you’d earn closer to £137, as each deposit only earns interest for part of the year.

So, if you have the money, depositing a large lump sum in a high-interest fixed-rate account could leave you better off in the long run.

7. Will you pay tax on interest?

One of the biggest snags to higher rates is you could end up being taxed on any interest earned on your savings. 

The personal savings allowance means basic-rate taxpayers can earn up to £1,000 a year in savings interest tax-free, while higher-rate taxpayers get a £500 limit. Additional-rate taxpayers have no personal savings allowance.

The best way to avoid a bill from HMRC is to open an Isa. They allow you to save up to £20,000 tax-free every year, and adults can choose four types of products - the cash Isa, stocks and shares Isa, innovative finance Isa and the lifetime Isa.

The most popular product is the cash Isa, which works in much the same way as a traditional savings account. This table shows the best instant-access and fixed-term cash Isa deals, ordered by term:

• Find out more: best cash Isas