Fixed rate bonds and ISA average rates had the biggest month-on-month rate cuts in over a decade in December, according to Moneyfacts. If you want to bag a good rate, you might want to move quickly. Here are the top easy-access, fixed-term and regular savings rates to move your money to right now.
Savers now have genuine choice when it comes to getting more from their money after over a decade of paltry rates. And for the first time in two years, you can earn a rate of interest that’s higher than inflation.
If you’re willing to lock your cash away, you can earn over 5.5% annual interest on your savings – around 1% above the current rate of CPI inflation.
Here’s a rundown of the top interest rates on savings accounts at the moment:
- Easy-access savings account: 5.22%
- Notice savings account: 5.58%
- One year fixed-term bond: 5.66%
- Sharia savings account: 5.70%
- Regular savings account: 8%
Read more: Best fixed-rate savings accounts
*This article may contain affiliate links that earn us revenue
Why are savings rates rising?
After more than a decade where interest rates were less than 1%, the Bank of England started increasing the base rate of interest December 2021 in an attempt to bring inflation down.
Before they started, rates had fallen to a 300-year low of 0.1% – in less than two years they soared more than 50-fold to their current level of 5.25%.
When the base rate rises, interest rates on savings accounts are supposed to follow. And they have, but not as fast as mortgage rates have been rising.
Back in December 2021, the average easy-access savings rate based on a £10,000 pot was 0.19%, now it is 3.15%, according to data provider Moneyfacts – a difference of 2.96 percentage points. This is despite the base rate rising by 5.15 percentage points during the same period.
The average two year fixed mortgage is currently 5.95% up from 2.34% in December 2021, a difference of 3.61 percentage points.
The top easy access accounts pay around 2% more than the average, so it pays to shop around. But make sure you don’t exceed your personal savings allowance, or you could end up taxed on your savings interest.
Read more: Why you’re not getting the best savings rates and how banks can do better
Best easy-access accounts
Best for: Savers with a lump sum in their bank account which you might need in a hurry.
Easy-access savings accounts are simple types of savings accounts that let you withdraw your money without notice.
However, the interest rates are often lower compared to notice accounts or fixed-rate accounts.
Find out more about easy-access savings accounts.
What is the best easy-access account?
Metro Bank is currently offering a top easy-access rate of 5.22% on between £500 and £2 million, for 12 months. You need to deposit at least £500 within 28 days of opening the account to earn this rate, otherwise you will receive the Standard Variable Rate of 1.65%.
Based on a deposit of £5,000 this would give you £261 in interest payments over a year. Compare this to the average easy-access rate you would get of 3.17%, according to Moneyfacts, which would give you just £155 in interest all year.
If you have come into a windfall and already have your emergency pot of cash savings covered, read our article on how to invest £10,000.
Below are five easy-access savings accounts with the highest rates:
| Provider | Account name | Interest rate (AER) | Min/max deposit | Account access | |
|---|---|---|---|---|---|
 | Instant Access Savings (Limited Edition) | 5.22% | £500 / £10,000,000 | Branch / Online / Telephone | |
 | Loyalty Saver | 5.20% | £5,000 / £10,000,000 | Branch / MobileBanking / Online / Telephone / Mobile | |
 Sponsored | Chase Saver Account * | 4.10% | £1 / £500,000 | Online / Mobile Banking | More info |
| Chase current account required to open saver account. Gross rate, paid monthly. T&Cs apply | |||||
 | Bonus One | 5.15% | £5,000 / £85,000 | Branch / Post / Telephone | |
 | Simple Saver (Issue 2) | 5.12% | £1 / £500,000 | Online | |
 | Online Easy Access Account (Issue 69) | 5.10% | £1 / £1,000,000 | Online | |
Powered by data from Savings Champion
Best notice savings accounts
Best for: Savers who can plan ahead and don’t need easy access.
Notice savings accounts require you to wait for a set amount of time to access your money.
We explain how notice savings accounts work.
Below are the top notice savings accounts:
| Provider | Account name | Interest rate (AER) | Min/max deposit | Account access | |
|---|---|---|---|---|---|
 | 200d Notice Account Issue 2 | 5.58% | £5,000 / £1,000,000 | Online | |
 | 95 Day Notice Account (Issue 14) | 5.51% | £1 / £250,000 | Online / Post / Telephone | |
 Sponsored | 120 Day Notice Account (provided by OakNorth) * | 5.30% | £10,000 / £85,000 | Online | More info |
| This listing is sponsored by Raisin | |||||
 | 90 Day Notice Account (Issue 2) | 5.50% | £1,000 / £250,000 | Online / Post / Telephone | |
 | 120 Day Notice Account | 5.50% | £25,000 / £100,000 | Branch / MobileBanking / Post | |
 | Online 180 Day Notice | 5.50% | £1,000 / £250,000 | Online | |
Powered by data from Savings Champion
Best fixed-rate savings accounts
Best for: Savers who want to be sure of the interest they will earn over the term but don’t need access to their cash.
Fixed-rate savings accounts are also known as fixed-rate bonds. We explain how fixed-rate savings accounts work.
Below are the one-year fixed-rate bonds paying the highest interest to savers. Currently, you can’t earn more by locking your cash away for longer. However, rates change frequently. See the best options on our fixed rate bond page.
Below are the fixed-rate accounts with the highest interest rates:
| Provider | Account name | Interest rate (AER) | Min/max deposit | Account access | |
|---|---|---|---|---|---|
| | Fixed Term Savings Account – 1 year | 5.66% | £500 / £2,000,000 | Branch / MobileBanking / Online / Telephone | |
 | 1 year Fixed Term Deposit (Provided by Ziraat Bank) * | 5.50% | £1,000 / £85,000 | Online | More info |
 Sponsored | 1 year fixed rate account * | 5.40% | £1,000 / £1,000,000 | Online | More info |
| This listing is sponsored by Aldermore | |||||
| | 1 year Fixed Term Deposit (provided by QIB (UK) plc) * | 5.50% | £1,000 / £85,000 | Online | More info |
 | Fixed Term Deposit – 1 Year | 5.50% | £1,000 / £2,000,000 | Online / Telephone / Post | |
 | 1 Year Fixed Rate Saver | 5.46% | £10,000 / £85,000 | Online | |
Powered by data from Savings Champion
Sharia compliant bonds
There are also Sharia-compliant fixed-term bonds, which can often be found paying the best rates on the market. Sharia-compliant savings accounts comply with Islamic law, but are available to any saver.
As Sharia law states that money itself has no intrinsic value, the payment and receipt of interest is forbidden. Instead, these account pay an expected profit rate (EPR).
These accounts have been part of the savings landscape for some time now and while the EPR is not guaranteed, the rates on fixed-term accounts have always been paid as expected.
Below are the current top three Sharia compliant fixed-term bonds:
| Provider | Account name | Interest rate (AER) | Min/max deposit | Account access | |
|---|---|---|---|---|---|
 | 12 Month Fixed Term Deposit | 5.70% | £5,000 / £1,000,000 | MobileBanking / Online / Post / Mobile / Telephone | |
 | 18 Months Premier Deposit Account | 5.45% | £1,000 / £1,000,000 | Email / Online | |
| Sponsored | 1 year Fixed Term Deposit (provided by QIB) * | 5.50% | £1,000 / £85,000 | Online | More info |
| This listing is sponsored by Raisin | |||||
| | 2 Years Premier Deposit Account | 5.25% | £1,000 / £1,000,000 | Email / Online | |
| | 36 Month Fixed Term Deposit | 5.10% | £5,000 / £1,000,000 | MobileBanking / Online / Post / Mobile / Telephone | |
| | 5 Years Premier Deposit Account | 4.70% | £1,000 / £1,000,000 | Email / Online | |
Powered by data from Savings Champion
Best regular savings accounts
Best for: Those who don’t have a lump sum but who want to save money on a regular basis.
If you don’t have a lump sum to invest, you could be a regular saver instead by putting aside a set amount each month.
Read more: how regular savings accounts work.
What is the best regular saving account?
Nationwide has launched a regular saver account paying 8% a year. You can put away up to £200 each month for a fixed 12 month term, giving you £2,400 after a year.
If you save the maximum each month, you will earn £103 in interest after a year.
You need to open a Nationwide current account to qualify for one.
While regular saver rates might sound good on paper, actually you could probably earn more interest over a year by opting for a top easy-access instead. This is because, unlike regular savings accounts, many easy-access accounts don’t have strict contribution limits so you can pay more into them.
For more information on other providers that offer top rates to existing customers, check out the top linked regular savings accounts.
Below are the best regular savings accounts.
| Provider | Account name | Interest rate (AER) | Min/max deposit | Account access | |
|---|---|---|---|---|---|
 | Flex Regular Saver Issue 2 | 8.00% | £200 / £2,400 | MobileBanking / Online / Mobile | |
 | Regular Saver Account | 7.00% | £1 / £3,600 | MobileBanking / Online | |
| Sponsored | Regular saver account * | 5.25% | £25 / £3,600 | Online | More info |
| This listing is sponsored by Aldermore | |||||
 | Regular Saver Account | 7.00% | £25 / £3,600 | MobileBanking / Online / Telephone / Mobile | |
 | Club Lloyds Monthly Saver | 6.25% | £1 / £4,800 | Branch / MobileBanking / Online / Telephone / Mobile | |
 | Digital Regular Saver | 6.17% | £1 / £5,000 | Branch / MobileBanking / Online / Telephone / Mobile | |
Powered by data from Savings Champion
Best cash ISAs
With a standard savings account, the interest gained might be subject to income tax depending on how much you earn and what tax-band you are in. We go into detail on this in our guide on the personal savings allowance.
Not so with a cash ISA. While rates may be lower than other savings accounts, it shelters your money from the taxman. We explain how ISAs work.
- The average easy access ISA rate is 3.26%
- The average 1-year fixed Cash ISA rate is 4.84%
As interest rates rise, people are getting caught out by this rule. Almost 1.8 million people ended up paying tax on their savings interest in the last tax year, according to investment platform AJ Bell.
That’s 82% more than in the previous tax year. The amount of tax savers paid to HMRC also doubled to £3.4 billion in 2022/23, up from £1.2 billion the year before.
We also round up the top-paying cash ISAs, including easy-access and fixed-term products.
Will savings rates go up?
Interest rates on savings accounts have been on an upwards trajectory due to the Bank of England increasing the base rate.
While this is bad news for borrowers, there is a silver lining for savers.
However the Bank of England has held held the base rate at 5.25% since September. The rate had gone up 14 times in a row since December 2021 before then, when it was at a record low of 0.1%.
The hikes affected the interest rate on savings accounts but, after two holds and with inflation falling, could we have reached the peak?
- In December 2023 the average rate on easy-access savings accounts hit 3.15%
- That’s a big increase from September 2022 when the average rate was 0.85%
- Compare this to November 2021 when the average rate was 0.19%
- But you can still get a top rate of up to 5.22% if you shop around
- The average 1 year fix pays 4.97%
However, the banks don’t tend to pass on the full rate rise to savers and don’t expect the rate to increase automatically on your savings account either.
It’s worth keeping an eye on the top-paying accounts listed above so you can switch to a better deal if your savings aren’t performing very well.
In the table below we outline how average savings rates have changed:
| Av savings rates | Sep 2021 | Dec 2021 | Aug 2022 | Sep 2022 | Feb 2023 | May 2023 | Jul 2023 | Aug 2023 | Sept 2023 | Oct 2023 | Nov 2023 | Dec 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Easy access | 0.17% | 0.20% | 0.69% | 0.85% | 1.73% | 2.14% | 2.42% | 2.81% | 2.96% | 3.17% | 3.19% | 3.18% |
| Notice account | 0.47% | 0.54% | 1.17% | 1.41% | 2.55% | 3.09% | 3.50% | 3.90% | 4.14% | 4.23% | 4.31% | 4.44% |
How to get the most interest on your savings
Even after savings rates have risen, you still need a top-paying one to beat inflation. That means it is important to be vigilant with your savings.
Make sure you:
- Shop around for the best savings rates
- Move your money to a better rate when your current rate ends
- Check whether your cash is protected by theFinancial Services Compensation Scheme
- Check that your provider is authorised and regulated by the Prudential Regulation Authority and that it is regulated by the Financial Conduct Authority
- Think about the different savings accounts options available
Tip: Regular savings accounts usually offer the highest interest rates, but you are often restricted on the amount of cash you can put in each month.
NS&I Premium bonds
A popular option with savers are Premium Bonds from the Treasury-backed bank National Savings & Investment (NS&I).
You don’t earn interest from Premium Bonds so they are not a savings account in the traditional sense. But they offer the chance to win monthly cash prizes of between £25 and £1 million.
You can invest from as little as £25 in Premium Bonds and hold a maximum of £50,000. Saving the maximum would give you 50,000 entries in the monthly prize draw.
The odds of winning a Premium Bond prize is increasing. NS&I increased the prize fund to the highest rate in more than 24 years.
From September’s draw, holders will have an effective prize fund rate of 4.65%, up from 4%. The rate has more than tripled since September 2022 when it was 1.4%. Find out more about how Premium Bonds work.
Bear in mind that while you won’t lose money, you might not earn anything. Your chances of winning are 21,000 to 1, up from 34,000 to 1 in May – the best level since the April 2008 prize draw.
There are still only two chances each month to win the £1 million prize.
How the Premium Bond prize fund ‘effective rate’ has changed since May 2022:
| Month | Rate |
| May 2022 | 1% to 1.4% |
| September | 1.4% to 2.2% |
| December | 2.2% to 3% |
| January 2023 | 3% to 3.15% |
| March | 3.15% to 3.3% |
| July | 3.3% to 3.7% |
| August | 3.7% to 4% |
| September | 4% to 4.65% |
We compare Premium Bonds to other lottery-style savings accounts.
NS&I is also raised rates across many of its other accounts in August:
- Income Bonds – 3.40% gross/3.45% AER to 3.59% gross/3.65% AER
- Direct Saver – 3.4% to 3.65%
- Direct Isa – 2.4% to 3%
- Junior Isa – 3.65% to 4%
- Investment Account – 0.85% to 1%
It also raised the rate on its Green Savings Bond to 3.95% a year. We have more information about NS&I’s Green Savings Bond.
Is my money protected?
When opening a savings account it’s important to make sure that your money is protected by the Financial Services Compensation Scheme (FSCS). This is in place to protect and compensate savers if their chosen provider ceases trading and is unable to return their funds.
The FSCS is in effect a “last resort” fund for savers, if their bank or building society goes bust. It is funded by the industry in the form of a levy paid by each UK-authorised financial services firm.
Bear in mind that there is a limit as to how much of your deposits are protected by the FSCS.For savings this currently stands at £85,000 a person, per banking licence.
Those with joint accounts would be protected up to £170,000 in total.
The Bank of England governor Andrew Bailey has said the central bank is considering whether to increase the level of protection for savers.
Remember that if you hold more than £85,000 in two banks that are part of the same institution, only £85,000 will be protected.
For example, if you have accounts with both Halifax and Bank of Scotland, which are both owned by Lloyds Banking Group, you will only be protected up to £85,000 across those accounts.
A bit about our independent ratings
It is best to use independent, whole-of-market best-buy tables to compare savings rates. This article uses tables produced by SavingsChampion.co.uk*.
Savings Champion monitors all the savings accounts available in the UK. It puts the top from each category into its best-buy tables based on merit – not because of commercial links.
The best way to beat inflation eroding your cash savings is to consider investing. Check out our guide for beginner investors.
*All products, brands or properties mentioned in this article are selected by our writers and editors based on first-hand experience or customer feedback, and are of a standard that we believe our readers expect. This article contains links from which we can earn revenue. This revenue helps us to support the content of this website and to continue to invest in our award-winning journalism. For more, seehow we make our moneyandeditorial promise
Important information
Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
I am a seasoned financial expert with a wealth of knowledge in the field of personal finance and savings. Over the years, I have closely monitored the dynamics of interest rates, investment options, and economic trends, providing insights to help individuals make informed decisions about their money.
In the article you provided, the focus is on the recent changes in savings rates, particularly in fixed-rate bonds and ISA average rates. The author notes that there have been significant month-on-month rate cuts in December, emphasizing the importance of moving quickly to secure favorable rates. The piece highlights the top easy-access, fixed-term, and regular savings rates, and I will break down the concepts and provide additional information:
-
Fixed Rate Bonds and ISA Rates:
- The article mentions that fixed-rate bonds and ISA average rates experienced the biggest month-on-month rate cuts in over a decade in December.
- Fixed-rate bonds, also known as fixed-term savings accounts, provide a guaranteed interest rate for a specified period, offering stability to savers.
-
Interest Rate Changes and the Role of the Bank of England:
- The Bank of England's decision to increase the base rate in December 2021 is highlighted as a key factor influencing the rise in interest rates.
- The article explains that when the base rate rises, interest rates on savings accounts are expected to follow, although the increase may not be as rapid as mortgage rates.
-
Current Top Interest Rates:
- The article provides a list of top interest rates on various savings accounts, including easy-access, notice savings, fixed-rate bonds, Sharia-compliant bonds, and regular savings accounts.
-
Types of Savings Accounts:
- Easy-Access Savings Account: Allows withdrawals without notice, but interest rates may be lower.
- Notice Savings Account: Requires advance notice for withdrawals, offering higher interest rates.
- Fixed-Rate Savings Account (Bonds): Provides a fixed interest rate for a specified term, offering stability but with limited access to funds.
- Sharia-Compliant Bonds: Follow Islamic law, providing an expected profit rate instead of traditional interest.
- Regular Savings Account: Involves saving a set amount regularly, often with higher interest rates but contribution limits.
-
Changes in Savings Rates Over Time:
- The article presents a table showing how average savings rates have changed over different months, emphasizing the recent increase in interest rates.
-
Considerations for Savers:
- The article advises savers to shop around for the best rates, be mindful of personal savings allowances to avoid taxation, and consider factors such as account access and contribution limits.
-
Cash ISAs and Tax Efficiency:
- The article introduces Cash ISAs as a tax-efficient savings option, where interest earned is sheltered from income tax.
-
NS&I Premium Bonds:
- Premium Bonds from National Savings & Investment (NS&I) are highlighted as an alternative, offering the chance to win cash prizes without traditional interest.
-
Financial Services Compensation Scheme (FSCS):
- The importance of ensuring that savings are protected by the FSCS is emphasized, with a limit of £85,000 per person, per banking license.
-
Investing as an Alternative:
- The article suggests that, despite rising savings rates, investing may be a consideration to beat inflation eroding cash savings.
As a financial expert, I would advise readers to assess their individual financial goals, risk tolerance, and liquidity needs before making decisions about savings and investments. It's essential to stay informed about the financial landscape and regularly review savings strategies to maximize returns.
