Which savings accounts pay the highest rate of interest?

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If you have savings, you should check the interest you’re earning and see if you can get a better interest rate elsewhere. So, which savings accounts pay the highest rate of interest?

Which savings accounts pay the highest rate of interest?

Interest rates are very low at the moment and some savings accounts pay no interest at all. Here’s my pick of the best buys:

Easy access accounts

ICICI Bank pays 1% on balances of £1 or more on its SuperSaver Account. It’s only available in branch. Be aware that the interest rate on this account drops to 0.75% from January 24th 2017. You can only get this account if you have an ICIC Home Vantage current account. Interest is paid monthly into this account.

Account operated? You have to open it in a branch and you can operate it online, in a branch or by post.

SAVVY TIP: ICICI Bank is covered by the UK savings compensation scheme, the FSCS. This means that your savings up to a limit of £85,000 (or £170,000 for a joint account) are protected. The limit increased from £75,000 on January 30th this year.

RCI Bank pays 1% on balances of £100 or more on its Freedom Savings Account. You can make as many withdrawals as you like and there’s no notice period or bonus. Interest rate is paid monthly or annually.

Account operated? You have to open it in online and you can operate it online, by phone or by post.

SAVVY TIP: RCI Bank is not covered by the UK savings compensation scheme, the FSCS. However, your savings are covered up to a limit of €100,000 by the French savings compensation scheme (called FGDR).

NS&I pays 1% on balances of £500 or more on its Income Bonds. You can take money out whenever you want and there’s no penalty on withdrawals. Interest is paid monthly on the 5th of each month. You can pay in between £500 and £1 million.

Account operated? You can open and operate it online, by phone or by post.

SAVVY TIP: Any money you have with NS&I is 100% guaranteed by the UK government – no matter how much you have.

Tesco Bank pays 1% on balances of £1 upwards on its Internet Saver Account, although this includes a bonus of 0.6% for 12 months. After that, the interest rate falls t 0.4%.

Account operated? You can open the account online and manage it online or via the mobile banking app.

SAVVY TIP: Tesco Bank is covered by the UK savings compensation scheme, the FSCS. This means that your savings up to a limit of £85,000 (or £170,000 for a joint account) are protected.

One year fixed rate savings accounts

You can earn more interest with fixed-rate accounts. Generally, with these accounts, you can’t get access to your money until the term ends.

Atom Bank one year fixed saver. This account pays 1.4% on balances above £50. The maximum you can save is £100,000. Atom Bank is an mobile-only bank.

Account operated? You can open it online or via the mobile app and you can operate the account via your mobile app.

Accepts top-ups? You have one week from when you open the account to transfer funds. After that you can’t top up your account.

SAVVY TIP: Atom Bank is covered by the UK savings compensation scheme, the FSCS. This means that your savings up to a limit of £85,000 are protected. You can’t have a joint savings account with the one year fixed-rate savings bond.  Atom Bank is a UK bank, set up by the founder of Metro Bank.

Ikano Bank one year fixed rate savings account pays 1.4% on balances of £1,000 or more. The maximum you can save in this account is £1 million. Interest is paid on the anniversary of you taking out the account, unless you choose the monthly interest option.

Account operated? You can open and operate the account online.

Accepts top-ups? You have 14 days from when you open the account to transfer funds. After that you can’t top up your account.

SAVVY TIP: Ikano Bank is covered by the Swedish savings compensation scheme.  Your savings up to a limit of £85,000 are protected (or £170,000 for joint accounts). There’s information on how your savings are protected here. Ikano Bank says that if it were to go bust, you’d be contacted by the UK’s savings compensation scheme (the FSCS) in English and that your compensation would be in pounds sterling not Swedish krona.

Charter Savings Bank one year fixed rate savings account. This account pays 1.38% on balances of £1,000 or more. Charter Savings Bank is a UK bank that was founded in 2015 and is part of Charter Court Financial Services, which was set up in 2008. It has been offering specialist mortgages and bridging loans under the brand of ‘Precise Mortgages’ for several years.

Account operated? You can open and operate the account online.

Accepts top-ups? You have 14 days from when you open the account to transfer funds. After that you can’t top up your account.

SAVVY TIP: Charter Savings Bank is covered by the UK savings compensation scheme, the FSCS. This means that your savings up to a limit of £85,000 (or £170,000 for a joint account) are protected.

Masthaven one year fixed rate savings account pays 1.35% on balances of £500 or more. The most you can save in this account is £250,000. Masthaven Bank is a UK bank that was set up in 2016. Its parent company has been offering specialist mortgages and bridging loans since 2004.

Account operated? You can open and operate the account online.

Accepts top-ups? You have seven calendar days from when you open the account to transfer funds. After that you can’t top up your account.

SAVVY TIP: Masthaven Bank is covered by the UK savings compensation scheme, the FSCS. This means that your savings up to a limit of £85,000 (or £170,000 for a joint account) are protected.

15 month account

I’m mentioning the Leeds building society account because it allows you to get access to some of your money before the fixed rate term is up. It’s useful if you don’t want to tie all your money up.

Leeds Building Society pays 1.3% on balances of £100 or more on its 15 month fixed rate access bond. It’s a 15 month account. You can save between £100 and £1 million (or £2 million for joint accounts). Watch out because if you have less than £100 in the account, the interest rate drops to 0.05%.  What’s unusual is that you can get early access to some of your money (see below).  The account matures on April 2nd 2018.

Account operated? You can operate it through your local Leeds Building Society branch, or by post.  You can take out up to 50% of the capital (the original amount you saved) as long as you have at least £100 in the account. However, you can only take out up to £300 in cash at a branch each day and up to £1,000 if you give 48 hours’ notice.

SAVVY TIP: Leeds Building Society is covered by the UK savings compensation scheme, the FSCS. This means that your savings up to a limit of £85,000 (or £170,000 for a joint account) are protected.

Related articles:

Tax-free savings allowance explained; interest of up to £1,000 a year tax free

Premium Bonds; are they worth saving in?

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