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A savings account can help to achieve your savings goals, from buying a house to paying for an unforgettable holiday. Take a look at the best savings account deals in the market so you can find the best place for your money
What is a savings account?
A savings account is a place where you can put your money and earn interest on the money you save. The interest rates can vary but it is a convenient way to look after your money if you want to save for the future. There are different types of savings accounts available to suit long-term and short-term savings.
Everyone has a personal savings allowance (PSA) which lets basic-rate taxpayers (20%) earn up to £1,000 in interest without paying any tax on it. If you are a taxpayer at a higher rate (40%) you can earn £500 in savings per year with no tax.
Types of savings accounts
Easy access savings accounts
An easy access savings account pays interest and gives you freedom to withdraw your savings when it suits you. It is definitely more flexible than other savings accounts in the market, but there may be some withdrawal limits or a short wait to access the money.
Notice savings accounts
A notice savings account requires you to give notice to your bank or building society before you can withdraw money. The notice period varies from a week to more than a month, depending on your account.
Fixed-rate bonds
A fixed-rate bond is a type of savings account that allows you to put your money away for a set amount of time. You aren’t able to take the money out or add more money during this time, but in exchange you are normally rewarded with a higher interest rate in comparison to other savings accounts.
Children's savings accounts
A children’s savings account is very similar to a savings account for adults and they are offered by banks and building societies. It is also a good way to educate children about money and encourage them to save in the future.
ISAs
ISA stands for Individual Savings Account and it was first introduced by the government as a way of encouraging people to save. The government said that this type of savings account would avoid any income tax, but there would be a limit on how much you could save in one each year. There are different types of ISAs, including cash ISA, lifetime ISA and stocks and shares ISA.
Best savings account for an emergency fund: 'I want to save but I also need to access the money easily'
Easy access is a flexible savings account as it allows you to withdraw and deposit funds quickly and easily. This makes it a suitable account for a rainy day or emergency fund and there is a low deposit to open an account, typically £1. Interest rates are normally variable so always keep an eye on the market to find the best deal.
Access of funds on two days during the year and can also close the product early if required.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 3.85% | 3.85% |
| 3.35% | 3.35% |
| AER rate | |
| Including bonus | Excluding bonus |
| 3.85% | 3.85% |
| 3.35% | 3.35% |
No notice, penalty, or charge applies.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 3.75% | 3.75% |
| AER rate | |
| Including bonus | Excluding bonus |
| 3.82% | 3.82% |
Best savings account for a large purchase: 'I want to save for our dream holiday'
Saving for a holiday is a popular reason for setting up a savings account. For this type of savings goal, you’ll want to access the money but might not need it immediately. This is why a notice savings account is worth considering as you can access the savings but you may have to wait for 30 days to make a withdrawal. The good news is that you’ll get higher interest rates on notice accounts compared to easy-access accounts.
Withdrawals are only permitted after 7 days notice has been given.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 3.5% | 3.5% |
| AER rate | |
| Including bonus | Excluding bonus |
| 3.56% | 3.56% |
A written notice period of 90 days is required for withdrawals.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.17% | 4.17% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.25% | 4.25% |
Best savings account for high interest rates: 'I have long-term saving goals'
If you don’t want to access the money regularly and you’re thinking about a long-term savings goal, then a fixed-rate bond may be the answer. These normally pay some of the best interest rates available, as the longer the bond, the higher rate you’ll get. This means it does come with a commitment, as you won’t be able to access the money for a long period of time.
No withdrawals or closure permitted during term.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.95% | 4.95% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.95% | 4.95% |
No withdrawals or closure permitted during the term of the account.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5.25% | 5.25% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5.25% | 5.25% |
Best children's savings accounts: 'I would like to start saving for my children’s future'
If you would like your child to have some money when they turn 18, it’s always best to start saving as early as possible. That being said, it’s never too late to save, so take a look at the market today and decide which account is most suitable for your savings. From an easy access children’s savings account - where you can pay in and take money out whenever you wish - to a regular savings account, which allows you to make regular monthly payments in return for a higher interest rate.
No notice, penalty, or charge applies.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.17% | 4.17% |
| 1.59% | 1.59% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.25% | 4.25% |
| 1.6% | 1.6% |
No withdrawals permitted during term of account. Early closure of the account is permitted without notice, penalty or charge.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5.5% | 5.5% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5.5% | 5.5% |
Best tax-free savings accounts: 'I've started paying tax on my savings'
If you are paying tax on your savings interest, then it makes sense to open a cash ISA. A cash ISA allows you to save money tax-free, however you can only add £20,000 into the account each tax year. There are also different types of cash ISAs, so it's worth exploring to find the correct account for your savings.
Withdrawals and closure permitted subject to 90 days loss of interest penalty.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.53% | 4.53% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.53% | 4.53% |
Withdrawals permitted subject to 120 days interest penalty.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.4% | 4.4% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.4% | 4.4% |
Pros and cons of a savings account
Pros
Cons
Source: Defaqto and Uswitch. Updated: December 9, 2022.
Discover Raisin UK
Raisin UK* is a free and easy-to-use service that allows you to view and manage your savings in one place. It has a variety of partner banks offering fixed rate bonds, notice accounts and easy access savings accounts, with different term lengths and features.
The whole process of finding the right savings account is simple with Raisin UK, so you can sit back, relax and watch your money grow.
*We have a paid partnership with Raisin so we may receive a small commission if you click on a deal and then purchase it.
Savings accounts FAQs
How does Uswitch choose its editor’s picks?
We know that the best deals are always changing, so the editorial team at Uswitch regularly checks the rates on this page and updates them at least fortnightly. To find the best deals we compare products by taking various factors into consideration, like the interest rate (AER), the balance needed to get the highest interest rate, minimum initial deposit, withdrawal conditions and the term of the account as applicable. These factors change subject to the category.
We use this system for the whole of the market covering nearly all, so you can get an overview of what the banks and credit unions are typically offering in the UK. All the banks featured are FSCS protected, so you can be reassured that your money is safe, provided it’s within the defined limits and regulations. To find out more about how FSCS looks after your money, visit fscs.org.uk.
How can I find the best bank for a savings account?
It's always a good idea to do your research before signing up for a new savings account. We can help you browse the best deals in the market so that you find the best place for your money.
What do I need to do to open a savings account?
If you would like to open a savings account, you can normally do this by visiting your chosen bank's branch, visiting their website or calling them. Some banks only allow you to open an account in a specific way, so always check the terms and conditions before proceeding. You'll then need to provide a proof of ID and proof of address so that the bank can complete necessary checks.
Can I get a joint savings account?
Yes, it is possible to set up a joint savings account and this will mean that the account belongs to yourself and the other account holder. You'll then both be able to deposit savings and build the pot together.
Is there a limit to how much I can save?
It depends on what account you open, as there can be some restrictions. For example, you can only save up to £20,000 in a cash ISA each tax year.
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