Best Savings Rates UK – Compare the Best Savings Accounts in the UK


2017 Guide: Finding the Best Savings Rates and Accounts


When UK consumers search for the best savings rates in the UK, they often look at UK savings accounts and ask the following questions: 

  1. Which bank offers the top savings rates in the UK?
  2. How do I find the best UK savings account that matches my needs?
  3. Where can I compare UK bank accounts that have the best UK savings rates?

Finding the best savings account in the UK is extremely important because the yield on an account will impact how fast your money grows and how quickly you achieve your personal savings goals.

Assuming you deposit £25,000 into a UK account with an annual equivalent rate (AER) of 1.25%, your total savings would be £1,612.33 over a five-year period.

Best Savings Rates

Monthly account fee of £0 and an AER that compounds daily

This comparison review by AdvisoryHQ’s editorial staff will help you understand and answer many of the facts and questions you may have about interest rates in the UK as well as a comparison of the best savings accounts UK consumers can access.

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Features of Savings Accounts in the UK

Some of the best savings accounts available to UK consumers today not only offer highly competitive interest rates across the UK but even offer several features that were traditionally only available with current accounts.

Not all savings accounts are built alike, however, with each one tailored to address specific account holder needs.

While searching for some of the best savings rates in the UK, you may identify several savings accounts as being able to meet your interest rate needs, but you must also look closely at what other terms and conditions you’ll have to comply with in order to benefit from those higher rates.

Some of the best UK savings accounts have the following features:

  • Easy to open (often without the need for in-branch processing)
  • Convenient to operate (characterised by online banking)
  • Offer higher interest rates (compared to current accounts)
  • When compared to other savings accounts in the UK (like higher interest-yielding products), they often have lower minimum opening or operating balances 
  • Many UK savings accounts allow you to conduct regular banking transactions (albeit at lower transaction levels than, say, current accounts)


What Does AER Stand for?

AER is an acronym for annual equivalent rate. AERs are used to level the field when comparing interest rates offered by multiple institutions because they include the aspect of compounding (earning interest on interest). 

AERs also make it easier to compare bank accounts in the UK on the basis of interest that account holders earn if they leave their savings at an institution for a duration of at least a year.

Best Savings Rates in the UK

In this review, we present a detailed comparison review of the best savings accounts UK consumers have access to along with some of the best savings rates in the UK.

It also includes an overview of the best banks offering these savings accounts.

Here is a list of the top savings rates in the UK presented in this article:

List of Best Savings Rates (UK)

Account/Product Name

AER%*

Nationwide

Regular Savings

2.00%

RCI Bank

Freedom Savings Account

1.65%

The West Brom

WeBSave Easy Saver

1.55%

The Melton Building Society

Online Homesave Account

1.51%

Kent Reliance

60-Day Notice Account – Issue 12

1.45%

Leeds Building Society

E-Saver

1.25%

NatWest

Instant Saver

0.75%

Tesco Bank

Internet Saver Account

0.75%

The Royal Bank of Scotland

Instant Saver

0.75%

Santander

eSaver

0.50%

Halifax

Everyday Saver

0.25%

Lloyds Bank

Easy Saver

0.25%

TSB Bank plc.

Easy Saver

0.20%

* These reflect post introductory/bonus period (which are usually offered for a term of 12 months) rates

Best UK Savings Rates

Note: While the above list represents some of the best savings accounts UK savers can find nationwide, it may not necessarily cover every bank or building society offering such products. Some lower-yielding banks, institutions, and savings accounts have been omitted because they did not meet our screening criteria.



Leveraging the Best Interest Rates in the UK

Whether you are a hardworking UK resident or an expatriate living or working abroad who wants to save some money in the UK, you are likely thinking about how to best leverage existing interest rates in the UK to make your money grow.

Image Source: Best Savings Rate UK

So what options do you have?

What are the best bank accounts that UK residents or expats have access to that will ensure that their savings grow with time?

Let’s take a look at just a few of the most common investment and savings accounts that UK consumers can access today:

  • Cash Accounts:  These are basic, no-frills bank accounts that are often used as starter accounts and can later progress into current accounts. Most cash accounts don’t allow overdraft protection but do allow you to conduct limited day-to-day banking.
  • Current Accounts: Account holders usually receive a cheque book and debit and cash cards along with these accounts. You are also often provided overdraft facilities and can link your account to make bill payments or regular deposits into the account.
  • Savings Accounts: These are vehicles that retail banking clients often use to save and grow their money.

Until recently, savings accounts in the UK offered a way for individuals to park spare cash while they waited for opportunities to deploy the funds elsewhere. However, the changes in everyday banking have transformed that paradigm!



What Is a Savings Account?

Savings accounts in the UK have undergone significant transformation over the past few years. In the past, they were primarily used as savings vehicles that took advantage of the high interest rates that the UK offered, but today, they are used by many as substitutes for lower interest-bearing current accounts. They offer comparatively higher interest rates which make it more attractive for savers to grow their money quickly over time.

UK Savings Account Rates Comparison

Below, we provide a table of some of the best savings rates that UK banks and other financial institutions currently offer. The table represents a sorted list of interest rates that UK institutions offer through different types of savings accounts and at various levels of balances held in those accounts.

Based on our analysis, the best savings account in the UK today is offered by Nationwide. While the institution offers various savings products to its clients, the Regular Savings account appears to have the best savings rate across the UK.

Please keep in mind that readers may see a single bank/building society appearing numerous times in the table presented in this review. That’s because the reviewers have assessed multiple product offerings from a single institution as well as multiple interest rates for UK consumers that are available at varying account balance levels from a single product.

TABLE 1: Best UK Savings Accounts Comparison (Accounts, AERs, and Required Account Balances)

Best Savings Rates

Account / Product Name

AER%*

Min. Bal*

Max. Bal

Nationwide

Regular Savings

2.00%

£500

£1,000

RCI Bank

Freedom Savings Account

1.65%

£100

£1,000,000

The West Brom

WeBSave Easy Saver

1.55%

£15,000

£250,000

The Melton Building Society

Online Homesave Account

1.51%

£100+

Nationwide

Regular Savings

1.50%

£200

£499.99

Kent Reliance

60 day notice account – issue 12

1.45%

£1,000+

Kent Reliance

Branch only easy access account – issue 3

1.35%

£1,000+

Kent Reliance

Easy access account –  issue 13

1.25%

£1,000+

Leeds Building Society

E-Saver

1.25%

£100

£1,000,000

The West Brom

WeBSave Easy Saver

1.10%

£5,000

£14,999.99

Nationwide

Regular Savings

1.00%

£100

£199.99

Nationwide

Flexclusive Saver Issue 7

0.90%

£1

£5,000,000

The Royal Bank of Scotland

Instant Saver

0.75%

£50,000+

NatWest

Instant Saver

0.75%

£50,000+

Tesco Bank

Internet Saver Account

0.75%

£1

£1,000,000

The West Brom

WeBSave Easy Saver

0.75%

£1

£4,999.99

Nationwide

Champion Saver

0.60%

£1,000

£5,000,000

Nationwide

Instant Access Saver

0.50%

£1

£5,000,000

The Royal Bank of Scotland

Instant Saver

0.50%

£1

£49,999

Santander

Everyday Saver

0.50%

£1

£2,000,000

Santander

eSaver

0.50%

£1

£2,000,000

NatWest

Instant Saver

0.50%

£1

£49,999

Nationwide

Regular Savings

0.25%

£0

£99.99

Halifax

Online Saver

0.25%

£1

£19,999

Halifax

Online Saver

0.25%

£20,000

£49,999

Halifax

Online Saver

0.25%

£50,000+

Halifax

Everyday Saver

0.25%

£1+

Lloyds Bank

eSavings

0.25%

£1

£9,999

Lloyds Bank

eSavings

0.25%

£10,000+

Lloyds Bank

Easy Saver

0.25%

£1+

TSB Bank plc.

eSavings

0.20%

£1+

TSB Bank plc.

Easy Saver

0.20%

£1+

TSB Bank plc.

Monthly Saver

0.20%

£1.+

Nationwide

Champion Saver

0.10%

£1+

£999

Santander

Instant Saver

0.10%

£1

£2,000,000

Kent Reliance

Easy access account – issue 13

0.10%

£1

£999

Kent Reliance

60 day notice account – issue 12

0.10%

£1

£999

Kent Reliance

Branch only easy access account – issue 3

0.10%

£1

£999

* These reflect post introductory/bonus period (which are usually offered for a term of 12 months) rates

When using the data provided in the table above, you are encouraged to carry out your own due diligence/research before making a final decision on which one is the best savings account for your needs.


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Please also bear in mind that you may come across interest rates that are higher than those listed here. For the most part, these are introductory/bonus rates that are offered for a very limited period and are discontinued at the end of that period.

In order for our readers to make unbiased and truly informed decisions on which savings accounts are the best for UK savers in the long-term, we have provided post-bonus period AERs.

The information from the table above is summarized below.

Best Rates – Sorted by the Maximum Rate Offered per Bank

Rate Comparison - UK

Best Rates – Sorted by the Minimum Rate Offered per Bank

Current Accounts - Ranking


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What Is the Difference Between a Savings Account and a Current Account?

While both products share remarkably similar features, savings accounts in the UK differ in some respects from their current account cousins.

Most current accounts are ideal for day-to-day banking, offering a comparatively higher number of no-fee banking transactions (compared to UK savings accounts).

Where the two differ is in the interest rates that they offer. Savings accounts offer some of the best savings rates in the UK but may require you to maintain higher operating balances to qualify for those rates.   

If I Have a Savings Account, Do I Also Need a Current Account?

That depends on the type of savings account you plan on opening. If you hold a relatively high cash balance during the year but do not perform too many day-to-day banking transactions (e.g., bill payments, regular deposits, writing cheques, etc.), then you’ll benefit from great UK savings rates by using a savings account.

If you operate your bank account frequently, then the level of daily-banking support offered by a current account may be ideal for you. However, with savings accounts offering some of the best bank interest rates in the UK, you can have both types of accounts operating simultaneously.

Will I Always Receive the Rates Noted in the Tables Here?

Not necessarily!

The rates provided in the tables and charts above are the interest rates that UK savers (and, where applicable, expats) can expect to receive today.

Since most of the products reviewed carry variable interest rates, these may change in the future.


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Am I Restricted to Operating My Savings Account Online Only?

That depends.

While some of the best savings accounts in the UK offer higher interest rates, they are able to do so on the understanding that account holders will largely be self-sufficient, operating their accounts online.

Hence, savings accounts don’t always come with the higher monthly fees associated with in-branch-based current accounts.

However, if you do have occasional and genuine service requests that can’t be dealt with online, most banks will gladly assist you in-branch.

What If I Do Not Pay Tax in the UK?

Financial institutions usually withhold 20% of the interest due to you at source. 

For UK residents earning below £15,600, they can receive the withheld amount by filling out an R85 declaration.

For more information, please refer to www.gov.uk/apply-tax-free-interest-on-savings.

For non-taxpayers, an R85 form needs to be filled out and provided to the institution, instructing it to not deduct interest payments at source for withholding tax purposes.

Can I Maintain a Savings Account If I Am a Non-UK Resident?

Many UK banks do not allow you to set up a savings account without a UK-based residential address.

However, many institutions extend some of the best savings account rates in the UK to overseas account holders through their offshore/international affiliations and branches.


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Additional Information and Features

Nationwide

Nationwide offers multiple savings accounts for UK savers. Some common features of these products include:

  1. Ability to open your account with an initial deposit as low as £1.00
  2. While the Regular Savings account from Nationwide has a maximum savings balance of £1,000.00, most other accounts offered by the bank allow you to save up to a maximum balance of £5,000,000.00
  3. All of the bank’s accounts offer unlimited withdrawals
  4. No notice period associated with any of these accounts

RCI Bank

RCI’s Freedom Savings account is great for saving for a goal, whether it be the purchase of a new home or any other large purchase.

Key features of this bank account for UK savers include:

  1. No notice period, fees or penalties applicable to the account
  2. Unlimited withdrawals and deposits from/to your account
  3. No fees imposed on any deposits or withdrawals
  4. Can start paying from a minimum of £100 up to £1,000,000
  5. Interest on account is paid either monthly or on an annual basis
  6. Balances of up to €1000,000 (euro) are protected by the bank’s deposit guarantee scheme

The West Brom

With the West Brom WeBSave Easy Saver account, you get convenient online access to your money while also enjoying some of the best savings rates in the UK on tiered balances.

Key features of this bank account for UK savers include:

  1. Extremely competitive variable rates
  2. Open an account with as little as £1,000
  3. Save as much as £250,000
  4. Operate your account and earn interest with a low balance of £1.00
  5. Access your money 24/7 via online access
  6. Tired rates allow you to earn more interest on higher account balances

The Melton Building Society

For savers that won’t need access to their funds for at least 30 days or more and are searching for high interest accounts in the UK to park those funds, Melton’s Online Homesave account is a great choice.

Key features of this bank account for UK savers include:

  1. Day and night access to your money via the institution’s online service
  2. Ability to start saving with a minimum balance of £100
  3. Withdraw a staggering £10,000 per day using online access to your account
  4. Interest is paid monthly so you can see your balance grow each month
  5. While there is a 30-day notice period to withdraw, this may be waived under certain circumstances

Kent Reliance

If you need access to some of the best savings rates the UK has to offer, but you don’t need quick access to your funds, then a 60 day notice account at Kent Reliance may be exactly what you are looking for.

Key features of this bank account for UK savers include:

  1. While you normally have to provide a 60-day notice to access your funds, in an emergency, you can access the money quickly by simply foregoing the accumulated 60-day interest in lieu of due notice
  2. Additional deposits are allowed into the account at any time
  3. You can open an account with a low opening deposit of £1,000
  4. Unlike many other institutions, there is no minimum age for account holders
  5. Accounts may be opened conveniently, either online, in-branch or by post 

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Leeds Building Society

For those savers looking to leverage high interest rates from UK savings accounts and who are comfortable operating an account online, the E-Saver account from Leeds Building Society will fit your bill perfectly.

Key features of this bank account for UK savers include:

  1. Savers opening an account towards the end of a calendar year will find the annual October 31 interest payment cycle ideal
  2. The account has a minimum opening and operating balance of a low £100
  3. While individual account holders can save a maximum of £1,000,000, that limit doubles (to £2,000,000) for a joint account
  4. So long as you maintain the minimum operating balance of £100, you are allowed unlimited withdrawals from your account
  5. Convenient online access provides you with the ability to open the account online, view your statements online, make online transfers, and monitor and track your transactions from home

NatWest

Savers who like to watch their money grow in their UK savings accounts each month will love what NatWest’s Instant Saver account has to offer.

Key features of this bank account for UK savers include:

  1. Interest computed on your balance daily and paid monthly – letting you watch your money grow each month
  2. Does not impose any withdrawal penalties, allowing you to withdraw cash when you need it
  3. Account holders as young as 16 years of age can open an account and start saving
  4. The account can be conveniently operated in multiple ways, either online, by phone or in-branch
  5. Savers get free access to a suite of budgeting, savings, and debt management tools

Tesco Bank

When shopping for the best savings account for UK consumers, the Internet Saver account from Tesco Bank is one worth checking out. If you love to bank online and want flexibility in your savings habits, this is the account for you.

Key features of this bank account for UK savers include:

  1. Accounts may be opened with as little as £1
  2. Ability to save as much as £1,000,000
  3. Instant online access to all your funds
  4. While there is a daily withdrawal limit on non-Tesco Bank accounts of £10,000, for security reasons, Tesco Bank account holders can withdraw as much as £100,000 a day
  5. In the event that you need to withdraw more than the daily limit, the bank’s flexible policy allows you to do so – with just a phone call/in-branch visit
  6. The account offers flexibility in making deposits – either through regularly setup direct debit or standing order transactions or via one-off deposits

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The Royal Bank of Scotland

If you are saving for a specific goal and are looking for a bank account with great interest rates for UK savers, then take a close look at RBS’s Instant Saver account.

Key features of this bank account for UK savers include:

  1. As this is a variable interest rate account, you may be able to leverage some of the best savings rates in the UK once interest rates start rising
  2. Since interest is paid out monthly, you will enjoy seeing your savings grow each month
  3. With no withdrawal penalties associated with the account, you can withdraw your money whenever convenient
  4. Register for digital banking, and you’ll have access to the bank’s free Savings Goals tool, as well as other tools, to help you plan your monthly budget
  5. For added convenience, this account enables you to manage your savings online, by phone or by visiting a branch in person

Santander

For savers who expect significant amounts of funds to accumulate over time, the eSaver account from Santander is a great place to park your money.

Key features of this bank account for UK savers include:

  1. If you are an existing 1|2|3 World or a Santander Select customer, you will receive a higher interest rate
  2. You may opt to have interest, which is calculated daily and deposited either monthly or each year on the account opening anniversary
  3. Take advantage of some of the best UK savings rates by saving as little as £1 or up to a maximum of £2,000,000
  4. Link your eSaver account to an existing Santander card to get access to your money via Santander cash machines
  5. Conveniently access your money or manage your account using 24/7 online or secure mobile banking features
  6. Receive free text and email alerts notifying you of changes to your account/balance

Halifax

If you are looking for a simple savings account in the UK that offers easy access to your money, coupled with no-hassle online, phone or in-branch banking, then the Everyday Saver account from Halifax is what you should be looking at.

Key features of this bank account for UK savers include:

  1. Open your account with as little as £1
  2. Manage your money and plan your savings in a way that meets your personal requirements
  3. Operate your account via phone, online or by visiting a branch close to you
  4. Get access to a cash machine card if you need to access funds through a money machine
  5. Make unlimited deposits and withdraw as many times as you wish without losing interest

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Lloyds Bank

For savers who are comfortable operating an Internet-based savings account, Lloyds Bank’s Easy Saver is one of the best savings accounts that UK retail banking customers have access to.

Key features of this bank account for UK savers include:

  1. Start an account by applying online with an initial deposit of as little as £1
  2. Ask for an optional Cashpoint® card and gain access to a vast network of ATMs
  3. Set up standing order deposits to automate your savings so your money can grow quickly
  4. No notice period required to withdraw your funds and you won’t lose any accumulated interest if you do make withdrawals
  5. Access your money and manage your account via the web or phone, by visiting a bank branch in person or through using your optional Cashpoint® card at ATMs

TSB Bank plc.

When you compare savings accounts in the UK, don’t forget to include the purpose of the account as a deciding factor. If you want to save to build a rainy day fund yet need access to the money without giving any notice to the bank, then TSB Bank’s Easy Saver instant access account is ideal for you.

Key features of this bank account for UK savers include:

  1. Receive interest on savings balances as low as £1
  2. For the first year of your savings, your money will be able to grow quickly with the help of a bonus interest rate
  3. Receive interest every year
  4. Unrestricted access to your funds online, via phone or through a large network of physical branches
  5. Get an optional ATM card, and access your money via a vast network of ATM machines
  6. Easily transfer funds between your Easy Saver account and your TSB current account

Disclaimer: The rates/AERs, minimum balance requirements, and other financial data presented in this article are those that have been identified by AdvisoryHQ based on a detailed level of research and due diligence. AdvisoryHQ’s proprietary UK savings account selection methodology focuses on identifying savings accounts in the UK that offer the best savings rates that UK consumers and retail customers are able to access.

Most of these types of rates are those offered by online UK banks that are available to any UK resident. Many institutions also allow non-UK residents that have a UK address to open UK savings accounts.

The above lists of the best savings accounts in the UK do not include every savings product imaginable. Please do not consider these lists as “comprehensive.”

The above rates also reflect the minimum deposited amounts on which interest is paid. Some banks offer higher interest rates to UK savers for higher deposits while others offer an additional limited-period bonus rate.

Please consult each bank’s website for information on the most updated rates and product offerings.

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