Best High Interest Savings Accounts

With interest rates at an all time low, savers are finding it difficult to find a savings account which offers them a good return on their money. The market is definitely tough at the moment and from January 2017 interest rates on savings accounts will fall further given the recent cut in interests rates to a historic low of 0.25%. In this article we take a look at the best offers on the market including the Best Current Accounts for savers, Easy Access Savings Accounts and Fixed Savings Accounts.

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Best Current Accounts For Savers

TSB’s Classic Plus

The TSB Classic Plus is one of the best current accounts available at the moment. It offers 5% on balances of up to £2,000. However this rate will drop in January to 3% on up to £1,500. It also offers customers 5% cashback on the first £100 spent each month through contactless debit card transactions. This could earn you over £100 per year. TSB will also offer a free bonus of £100 when you switch to them if certain criteria are met.

The downside is that customers wanting to use the account are required to pay in a minimum of £500 each month to benefit from the rate. They also need to register for the online banking function and opt for paperless statements. TSB offers the full £75,000 UK Savings Safety Guarantee.

Nationwide’s FlexDirect

FlexDirect from Nationwide also pays out 5% interest for account holders. The rate is applied for all savings held in the account, up to a maximum of £2,500. The downside, however, is that anyone wishing to use the account is required to pay in a minimum of £1,000 each month to maintain the rate. And after just twelve months Nationwide actually decreases the interest to just 1%.

Nationwide offer a “refer a friend scheme” which nets both you and your friend a £100 bonus if they switch to this account. You can refer up to 10 friends per year, earning you a nice £1,000 bonus if you’re a persuasive type. The account offers an interest free overdraft for 12 months (reverts to 50p per day for the overdraft after 12 months). Nationwide offers the full £75,000 UK Savings Safety Guarantee.

Club Lloyds Account

Club Lloyds account customers are able to realise 4% interest on their balances, provided that they hold between £4,000 and £5,000 in the account. However, there are some significant restrictions for account holders to achieve this rate, including being required to set up two direct debits from the account, and to pay in a minimum of £1,500 each month. In addition, customers are required to pay a £5 charge monthly (£3 from January)  if they fail to adhere to this requirement. In the event that customers have smaller balances, this will lead to lower interest rates, with Lloyds offering just 1% on savings up to £2,000, and 2% for between £2,000 and £4,000.

The headline rate will fall in January to just 2% on the full balance of the account. Nationwide offers the full £75,000 UK Savings Safety Guarantee in conjunction with Cheltenham & Gloucester so make sure you don’t hold more than £75,000 between these 2 banks.

Santander 123

The Santander 123 account recently reduced its interest rates from 3% to 1.5% on balances of up to £20,000. Despite this it still offers an attractive option for bigger savers. The account offers 3% cashback on landline, mobil, internet and TV bills, 2% on energy bills and 1% on water, council tax and Santander mortgages. To qualify for this and the interest rates you must pay in at least £500 per month and have 2 active direct debits on your account.

Santander offers the full £75,000 UK Savings Safety Guarantee in conjunction with Cahoot so make sure you don’t hold more than £75,000 between these 2 banks.

 

 

Easy Access Savings Accounts

National Savings & Investments

The Governments own savings provider offers the best interest rate – 1% – for an “easy access” savings account. Withdrawals are penalty free and immediate although the minimum withdrawal is £500. Savers can put up to £1m in the account which is  managed online or by phone and 100% of your money is secured by the Government. The rate is variable and so could drop at any time.

Sainsbury’s Bank

Sainsbury’s eSaver account offers 1% interest on balances of £30,000 and above. £15,000 to £30,000 earns 0.85%, £1,000 to £15,000 earns 0.7% and smaller sums earn a measly 0.5%. This online account allows customers to make unlimited penalty free withdrawals but the interest rate is variable and so could drop at any time. Sainsbury’s Bank offers the full £75,000 UK Savings Safety Guarantee.

Post Office

The Post Office offer a savings rate of 0.9% but with a 0.65% bonus for the first 12 months. After this the interest rates falls to 0.25% so this is only an attractive option for savers willing to switch accounts after 12 months. Savers can deposit anywhere between £1 and £2m and withdrawals are unlimited and penalty free. Savers have the option of monthly or annual interest payments with the monthly option offering a slightly lower interest rate.

 

 

Fixed Savings Bonds

1 Year

Atom Bank

Atom Bank offers a fixed interest rate of 1.40% on a 12 month Fixed Deposit Account. Savers can deposit an amount between £50 and £100,000 and access is exclusively via their mobile app. Withdrawals are not permitted within the 12 month period and interest is paid monthly or annually. The Durham based bank offers the full £75,000 UK Savings Safety Guarantee.

Charter Savings Bank

Charter Savings Bank offers a fixed interest rate of 1.38% on a 12 month Fixed Deposit Account. Savers can deposit an amount between £1,000 and £250,000 and access is exclusively via their website. Withdrawals are not permitted within the 12 month period and interest is paid monthly or annually. Charter offers the full £75,000 UK Savings Safety Guarantee.

Metro Bank

Metro Bank offers a fixed interest rate of 1.20% on a 12 month Fixed Deposit Account. Savers can deposit any amount over £500 and access is by internet, telephone or in branch. Withdrawals are not permitted within the 12 month period and interest is paid monthly or annually. Metro Bank offers the full £75,000 UK Savings Safety Guarantee.

3 Year

Ikano Bank

Ikano Bank is from Sweden but operates in the UK and offers a fixed interest rate of 1.63% on a 3 year Fixed Deposit Account. Savers can deposit an amount between £1,000 and £1m and access is via telephone and internet. Withdrawals are not permitted within the 3 year period and interest is paid monthly or annually. The Swedish bank offers £75,000 of protection via the Swedish Deposit Insurance Scehem. The UK Government Scheme does not apply here.

Axis Bank

Axis Bank offers a fixed interest rate of 1.5% on a 3 year Fixed Deposit Account. Savers can deposit an amount between £1,000 and £200,000 and access is by post or in branch. Withdrawals are not permitted within the 3 year period and interest is paid monthly or annually. Axis Bank offers the full £75,000 UK Savings Safety Guarantee.

Tesco Bank

Tesco Bank offers a fixed interest rate of 1.41% on a 3 year Fixed Deposit Account. Savers can deposit an amount between £2,000 and £5m and access is via their website. Withdrawals are not permitted within the 3 year period and interest is paid monthly or annually. Tesco Bank offers the full £75,000 UK Savings Safety Guarantee.

5 Year

Secure Trust Bank

Secure Trust Bank offers a fixed interest rate of 2.01% on a 5 year Fixed Deposit Account. Savers can deposit an amount between £1,000 and £1m and access is by post or telephone. Withdrawals are not permitted within the 5 year period and interest is paid monthly or annually. Secure Trust Bank offers the full £75,000 UK Savings Safety Guarantee.

Vanquis Bank Savings

Vanquis Bank Savings offers a fixed interest rate of 1.9% on a 5 year Fixed Deposit Account. Savers can deposit an amount between £1,000 and £250,000 and access is by post or telephone. Withdrawals are not permitted within the 5 year period and interest is paid monthly or annually. Vanquis Bank Savings offers the full £75,000 UK Savings Safety Guarantee.

Tesco Bank

Tesco Bank offers a fixed interest rate of 1.51% on a 5 year Fixed Deposit Account. Savers can deposit an amount between £2,000 and £5m and access is via their website. Withdrawals are not permitted within the 3 year period and interest is paid monthly or annually. Tesco Bank offers the full £75,000 UK Savings Safety Guarantee.

High Interest Savings

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