Best Savings Rates
Advice, help, information and guidance on savings, interest rates, and savings tax advice.

Best Savings Account Rates

best savings rates by AnnaSo, having looked at all the various aspects of saving, where would I suggest you look for the best savings account rates, and more importantly a combination of tax free saving, good returns and security.  Remember that inflation can, and will, erode the good work of high interest rates and compounding, so it pays to check the rates regularly. One of the things that most savers are notoriously bad at, is switching accounts - many savers leave their money in accounts paying less than inflation - please don't! I know it requires a bit of effort, but it will be worth it longer term. If you don't, then a savings account becomes a loss making account, and you may as well be trading and investing like me where losses are part and parcel of everyday life!

Best Bank Savings Rates - Tax Free Saving

Let's start with low risk tax free. Forget premium bonds, which are a great gimmick, but offer terrible returns. I can guarantee that you will not win the top prize and in trying, you will have lost a huge amount of interest. So first, get a cash ISA - you can save up to £3,600 per annum tax free, so use your allowance. Next, look at index linked savings certificates, backed by the Treasury and therefore 100% secure. The index linking will help to offset some of the erosion of inflation which for these products is measured using the RPI. You can invest up to £30,000 in these, and the best part is they are tax free. They don't offer the best rates, but if you can buy them and forget about them for the long term, they do offer a good option.

Compare Savings Rates - Types of Savings Accounts

Below I have listed the principle types of savings accounts available and the advantages and disadvantages of each. In simple terms there are five main types as follows :

Type of Account Description Advantages Disadvantages
Easy Access - No Notice Accounts Instant access to your money with no penalties. Can generally be opened with very small amounts, even as low as £1. Some lenders offer an introductory bonus which may limit the number of withdrawals allowed. Savings interest rates generally move in line with BOE rates Immediate access to your money. Interest rates normally vary with changes in the BOE rates, so if rate increase then the account rates will rise accordingly. Certainly not the best savings rates, and often the worst. Remember flexibility comes at a price!
Notice Accounts Notice is required in order to withdraw funds. Periods are generally around 60, 90 or 120 days. Higher savings rates which are normally variable and change with BOE rates. Penalties if you take your money out early
Bonds or Term Accounts Generally long term accounts where cash is tied up for between 1 and 5 years. Most providers do not allow access to funds before the maturity date. Normally offer the best savings rates available. Excellent for long term savings where money can be tied up for the long term. Interest rates generally don't vary, so if BOE rates (or others ) increase then the rate will often remain fixed. Access to funds at short notice is not permitted and most providers do not allow further deposits to be made, once initial funds have been deposited.
Regular Savings Accounts A regular savings account normally requires you to pay in regular amounts set at maximum and minimum levels. Lump sum payments  are normally not allowed. These types of accounts often offer big bonuses if certain conditions are met - generally if you only make a few withdrawals within a period, or a certain number of deposits are reached.  Most accounts offer variable rates, so if the BOE rate changes then so will the account rates. You are forced to save a certain amount each month which is good discipline. They can offer some of the best interest rates, but these are often conditional on various factors which can be restrictive. The account has maximum and minimum deposits which can restrict windfall benefits should extra cash suddenly become available. You cannot make lump sum deposits.
Tax Free Accounts Cash Isa - allows you to invest up to £3,600 per annum tax free. If you would like more information about the best isa to consider please just follow the link above. Tax free savings each year - so use it!! Many lenders offer introductory bonuses, so take advantage, but move your funds once the offer ends. Not always the best savings rate, but these are tax free, so you have to take this into account when working out the return. Check to make sure your ISA accepts transfers - some do not allow this, so you could be stuck in the same ISA wrapper and not be able to move. If you do close the account you lose the tax benefit.
Children's savings Accounts Accounts for children work in a very similar way to those for adults. In general there are three types available : easy access, notice and bonds/term. Generally no minimum age limit so accounts can be opened at birth. Given the compound effect of interest I would urge you to do so, sooner rather than later. Normally requires a parent or guardian to open the account up to 7-11 years of age. As detailed for the specific accounts above

 

OK, I hope the above has given you a feel for the best, and possibly worst accounts for savings rates - finally let me suggest some savings tips which I hope you will find useful.

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