23 July 2023 , 06:00
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Inflation was this week confirmed to have fallen by more than expected in a hopeful sign for struggling families.
The Consumer Prices Index (CPI) measure of inflation fell to 7.9% in the 12 months to June, after spending the two previous months stuck at 8.7%.
Crucially, this doesn’t mean prices are no longer rising - prices are still going up, just at a marginally slower rate than before.
This means getting the best rate for your cash has never been more important.
Savings rates have gone up massively compared to this time last year - although they still don’t beat inflation.
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But your cash has to go somewhere - so make sure you shop around for the best rates.
Always make sure you are covered by the Financial Service Compensation Scheme (FSCS) which protects up to £85,000 of your money if a provider goes bust.
If you have a lot of money to put away, keep in mind you can only earn a certain amount in interest each year before you start paying tax.
The personal savings allowance is £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers, while additional rate taxpayers don't get an allowance at all.
Additionally, you can put away £20,000 each year into an ISA account and any interest earned here is always tax-free.
Savers should be warned that rates are changing rapidly - but here are the top rates at the time of writing.
Best easy-access savings accounts
Easy-access savings accounts allow you to withdraw your money without giving notice - although some providers do limit how many withdrawals you can make.
This is good for those who may need to dip into their savings - although the rates aren’t as good as fixed accounts.
The top-paying account at the time of writing is Hanley Economic Building Society - but you can only make one withdrawal per month.
You can also only open and manage this account by post or in branch.
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Shawbrook Bank - 4.52% (deposit between £1,000 and £85,000 - minimal withdrawal £500)
Chip - 4.51% (deposit between £1 and £250,000)
Coventry Building Society - 4.5% (deposit between £1 and £250,000 - maximum four withdrawals, then next charged at 50 days' interest)
Oxbury - 4.46% (deposit between £1,000 and £500,000)
Skipton Building Society - 4.45% (deposit between £1 and £1million - includes 0.62% bonus for first 12 months)
Best regular savings accounts
Regular savings accounts normally require you to deposit money each month, typically a small amount - in return, the rates are better.
However, these accounts aren't for everyone and you'll need to read the terms and conditions carefully.
Some need you to have a current account or another product with the provider already, while others limit how many withdrawals you can make, or they cap how much you can save.
In most cases, the rates are fixed for 12 months - although some are variable.
Here, we've listed top-paying accounts at the time of writing:
- Skipton Building Society - 7.5% fixed for one year (save up to £250 each month, can skip months, no withdrawals but you can close the account early)
- First Direct - 7% fixed for one year (save between £25 and £300 each month, no skipping months allowed, and you can only withdraw money after one year unless you close your account, in which case your rate drops to 1.30%)
- Lloyds Bank - 6.25% fixed for one year (save up to £400 each month, can skip months and withdrawals allowed)
- NatWest/RBS - 6.17% variable on up to £5,000 (save up to £150 each month, can skip months and withdrawals allowed)
- Bank of Scotland - 5.5% fixed for one year (save up to £250 each month, can skip months and withdrawals allowed)
- Halifax - 5.5% fixed for one year (save up to £250 each month, can skip months, can only withdraw money after one year unless you close your account)
- Nationwide - 5.5% variable for two years (save up to £50 each month, can skip months and withdrawals allowed)
- Lloyds Bank - 5.25% fixed for one year (save up to £250 each month, can skip months and withdrawals allowed)
Barclays - 5.15% variable on up to £5,000 (no maximum monthly deposit, can skip months and withdrawals allowed)
TSB - 5% fixed for one year (save between £25 and £250 each month, can skip months but need to cancel standing order and withdrawals allowed but funds can't be replaced)
HSBC - 5% fixed for one year (save between £25 and £250 each month, can't skip months, no withdrawals)
Santander - 5% fixed for one year (save up to £200 each month, can skip months and withdrawals allowed)
It is worth checking with your bank to see what rate they offer with their regular saver - and if you're not happy, consider switching elsewhere.
Best notice savings accounts
Like the name suggests, these accounts require you to give notice when you want to withdraw your money.
The top-paying notice accounts right now are:
Vanquis Bank - 5.35% (90 day notice - deposit between £1,000 and £250,000)
Kent Reliance - 4.75% (60 day notice - deposit between £1,000 and £1million)
Best fixed-rate savings accounts
Fixed-rate accounts don't normally allow you to withdraw your money until the end of the term - not ideal for households who may need to access their funds.
You do get a return compared to easy-access accounts, but as rates are expected to keep rising, it might be a good idea not to fix for too long.
The top-paying fixed accounts right now are:
Secure Trust Bank - 5.45% (six months fixed - deposit between £1,000 and £1million)
Monument Bank - 5.45% (six months fixed - deposit between £25,000 and £400,000)
National Bank of Egypt UK via Raisin - 5.54% (nine months fixed - deposit between £10,000 and £85,000)
Atom Bank - 6.05% (one year fixed - deposit between £50 and £100,000)
Monument Bank - 6.05% (one year fixed - deposit between £25,000 and £400,000)
Close Brothers - 6.07% (two year fixed - deposit between £10,000 and £2million)
RCI Bank - 6% (three year fixed - deposit between £1,000 and £1million)
Principality Building Society - 5.8% (five year fixed - deposit between £500 and £2million)
Best ISA accounts
ISA stands for Individual Savings Account.
Each year, you can deposit £20,000 into an ISA and you don't pay tax on the interest.
The rates on these savings products have been improving in recent years, although you can still get better rates elsewhere.
The top-paying easy-access cash ISAs right now are:
Shawbrook Bank - 4.22% (minimum deposit £1,000 - minimum £500 withdrawal)
Principality Building Society - 4.2% (minimum deposit £1 - includes 0.4% fixed bonus for 12 months)
Leeds Building Society - 4.2% (minimum deposit £1,000 - account closes on August 31, 2025)
Post Office - 4.1% (minimum deposit £1 - includes 2.67% fixed bonus for 12 months
Halifax - 4.1% (minimum deposit £1 - maximum three withdrawals a year, then rate falls to 1.05%)
The top-paying fixed-rate ISAs right now are:
NatWest / RBS - 5.7% (one year fixed - minimum deposit £1,000)
NatWest / RBS - 5.9% (two year fixed - minimum deposit £1,000)
Virgin Money - 5.55% (three year fixed - minimum deposit £1)
Close Brothers - 5.55% (three year fixed - minimum deposit £10,000)
Principality Building Society - 5.35% (five year fixed - minimum deposit £500)