Top savings accounts that will make you the most money in a year
Interest rates on savings accounts have seen dramatic improvements this year - meaning now is the time to make sure you're getting the best return on your money.
The Bank of England began raising interest rates back in December 2021 - at the time it sat at a record low of 0.1%. Since then, the base rate has skyrocketed and is now at 5.25%. The Bank of England base rate affects the interest rate banks offer on their savings products.
Interest on a savings account is the amount of money a bank will pay you for holding your money with them. Financial expert from Moneyfactscompare.co.uk Rachel Springhall said: "Picking the right kind of savings account to suit these different needs is vital. Easy access accounts are good for flexibility, but some can pose withdrawal restrictions.
"Regular savings accounts encourage savers to put money aside every month, usually for a year. Fixed-rate bonds offer much higher rates than variable savings accounts, but savers must be comfortable locking away their cash. Savers will find many of the top rates online so it’s wise to sign up to newsletters and be vigilant of the top rate tables.”
To help, The Mirror has worked out how much you could potentially earn in interest when saving into the accounts which are offering the highest interest rates right now. However, keep in mind these amounts are estimated balances, and some accounts have a variable rate - which means the interest offered can both rise and fall.
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Before you sign up for a savings product, you should read the terms and conditions so you are fully aware of the rules behind the account.
Regular Savings Accounts
If you usually save little and often, regular savings accounts may be the best for you. These currently offer the highest rates, but you're capped at how much you can save each month.
You also are sometimes limited with how many withdrawals you can make, or you won't be allowed any at all. These balances have been worked out using the Regular Savings Calculator from Nottingham Building Society.
Nationwide - 8%
Nationwide's regular FlexSaver account is fixed at 8% for 12 months and it lets you put away £200 a month. Nationwide does allow you to make three withdrawals a year without it affecting the interest rate however if you go over this the rate will drop to 2.15%. This means after 12 months you could save £2,400. By depositing the full amount each month - and with the interest on top - you would make £104 giving you a balance of £2,504 at the end.
Skipton Building Society - 7.5%
Skipton Building Society's Regular Saver account offers a fixed rate of 7.5% over 12 months and the maximum you can put away is £250 a month. If you put away this amount, then you would create a cash pot of £3,000 and you would make £121 in interest. Overall, this account would give you a cash pot of £3,121.
If you were to put in only £200 a month after 12 months you would have a cash pot of £2,400 and the interest you would earn would be £97.50 - taking your cash pot to £2,497.50.
First Direct - 7%
First Direct's Regular Saver account has a fixed rate of 7% across 12 months and savers can put away a maximum of £300 each month. Over the year, this would create a pot totalling £3,600 at the most and you would earn £136.50 worth of interest. If you were to put away only £200 a month - then you would have a savings pot of £2,400 by the end of it. With First Direct's 7% rate, you would earn £91 in interest taking your cash pot to £2,491.
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Easy Access Savings Accounts
These are accounts that generally allow you to withdraw money whenever you need it, although you may find some accounts restrict how many withdrawals you can make in a year.
You can save as little or as much as you want each month. These balances have been worked out using the Savings Interest Calculator from Tipton Building Society.
Paragon Bank - 5.16%
Paragon Bank's Double Access Savings Account is offering 5.16% and this easy access account doesn't allow you to make an unlimited amount of withdrawals - you can only make two before the rate is affected. If you make a third withdrawal it will drop to 1.5%. To open this account, you will need a £1,000 deposit.
If you plan on saving £200 - on top of your initial £1,000 deposit - after a year you will have a cash pot of £3,518.68 and £118.68 of this will be the interest earned. For savers putting £500 a month in, they will have earned £219.30 in interest with a final cash pot of £7,219.30 after 12 months. For those putting in £1,000 each month, they will come out with a cash pot of £13,387 having earned around £387 in interest.
Cynergy Bank - 5.15%
The bank's Online Easy Access Account is currently offering an interest rate of 5.15% for the first 12 months - after this, the rate will drop to 4%. You can open this account with as little as £1 and you are allowed unlimited withdrawals from your cashpot.
So if you were planning to put away £200 every month for one year, you will have again saved £2,400. With the interest rate offered, you will have earned £66.95 taking your total cahspot to £2,466.95.
If you plan to put a little more cash away like £500 a month for the year, then you would put away £6,000 over 12 months. With this rate, you would earn £167.38 giving you a total saving pot of £6,167.38. Putting £1,000 away each month would save you £12,000 over the year and with this rate, you would have a cash pot of £12,334.75 overall - so you will have earned £334.75 in interest.
Notice Savings Accounts
A notice savings account is a type of savings account that has no fixed term but requires a notice period before you can withdraw your money. The notice period could be anything from 30 days, with some even stretching to 180 days, depending on the account's terms.
Shawbrook - 5.56%
With this one, you need to deposit £1,000 to open an account and going forward you will need to keep the balance over £1,000 to get the rate of 5.56%. With this account, you need to give 120 days' notice if you want to withdraw money - however, you can make as many withdrawals as you would like.
If you deposit £1,000 and add no other payments over one year, you would generate an estimated balance of £1,056 - so you will have earned £56 worth of interest.
So with this account, if you deposit £1,000 and then continue to add £200 each month for 12 months you will have an overall balance of £3,527.88. This includes the £127.88 you have earned in interest over this year.
For those wanting to add £500 each month - including the £1,000 deposit - you will earn around £236.30 in interest giving you a total cashpot of £7,236.30 overall. For the big savers, if you add in £1,000 every month, including the £1,000 deposit, then you will have a cash pot of £13,417 over 12 months and of this, £417 will be the interest you have earned.
Oxbury Bank - 5.51%
Oxbury Bank's personal 90 day notice account is currently offering an interest rate of 5.51% and like Shawbrook, you will need to have a minimum of £1,000 in your account to get the 5.51% rate. Again, you can make as many withdrawals as you like but you will need to give 90 days notice, or three months, to take this money out.
So on top of the initial £1,000 deposit, if you save £200 a month you will make around £126.73 in interest and your cash pot will come to around £3,526.73. For those saving £500 a month, your cash post will sit at £7,234.18 and of that £234.17 will be the interest earned. Finally, for a £1,000 saving each month for 12 months you will come away with a cash pot of £13,413.25 and of that £413.25 will be the interest you have earned.
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