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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 accounts 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, but if you are an additional-rate taxpayer (45%), you will pay tax on all interest earned.
Types of savings accounts
Easy access savings accounts
An easy access savings account pays interest and gives you the freedom to withdraw your savings when it suits you. It is more flexible than other savings accounts in the market, although there may still be some withdrawal limits or conditions.
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 the terms of the 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 can’t take the money out or pay more in 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 is offered by banks and building societies. It can be a good way to educate children about money and encourage them to save in the future.
ISAs
ISA stands for Individual Savings Account, a tax-efficient savings vehicle introduced by the government as a way of encouraging people to save. With this type of savings account, you can avoid paying income tax on your interest, but there is a limit on how much you can save into 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, especially as you usually only need a low deposit to open an account. Interest rates are normally variable so always compare savings rates to find the best deal.
No notice, penalty, or charge applies.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 6.78% | 4.31% |
| 0% | 0% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.5% | 7% |
| 0% | 0% |
Withdrawals in store permitted are subject to a maximum of £1,000 per day.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5% | 5% |
| 5.25% | 5.25% |
| 5.5% | 5.5% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5.09% | 5.09% |
| 5.35% | 5.35% |
| 5.61% | 5.61% |
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 probably want to access the money soon, but not immediately. So, a notice savings account allows withdrawals but makes you wait a certain period of time before accessing the money. This means you generally get higher interest rates on notice accounts than on easy-access accounts.
Withdrawals and closure permitted subject to 14 days' notice.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.8% | 4.8% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.8% | 4.8% |
30 days notice or a 30 day interest penalty is required for all withdrawals and closure.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5% | 5% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5% | 5% |
Best savings account for high interest rates: 'I have long-term saving goals'
If you don’t want to access your 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, but a fixed-rate bond does come with a commitment, as you won’t be able to access the money for a long period of time.
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 said, it’s never too late to start saving, so compare savings accounts today and decide which account is most suitable for your needs. 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, with which you make regular monthly payments in return for a higher interest rate.
No notice, penalty, or charge applies.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.89% | 4.89% |
| 2.23% | 2.23% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5% | 5% |
| 2.25% | 2.25% |
No notice, penalty, or charge applies.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5.8% | 5.8% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5.8% | 5.8% |
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 the options to find the correct account for your savings.
No withdrawals permitted during the term. Closure permitted subject to 180 days interest penalty.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5.71% | 5.71% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5.71% | 5.71% |
No withdrawals permitted. Closure permitted subject to 120 days' loss of interest.
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5.15% | 5.15% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5.15% | 5.15% |
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 savings accounts 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, including the interest rate (AER), the balance needed to get the highest interest rate, minimum initial deposit, withdrawal conditions, and the term of the account. These factors change subject to the category of account.
We use this system for the whole of the market covering nearly all account providers, so you can get an overview of what is available and compare savings accounts 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 compare the savings rates on offer from the best deals in the market so that you find the right home 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 the bank can complete the 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 money into the account and build your savings 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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