SAVERS are hard-pressed to get much bang for their buck at the moment – but some accounts are more generous than others.
As the cost of living crisis continues to bite, it’s important to put your money to work.
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Savings accounts and cash Isas pay you a set amount of interest on your money – and while it’s not much, every little helps.
We’ve rounded up all the best accounts on offer to see how much you can earn on your cash in the bank.
ISAs
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Individual Savings Accounts (Isas) are a tax-free type of savings account, meaning you don’t pay tax on any interest you earn.
Each year you can stash up to £20,000 into an Isa – and this allowance resets with each new tax year on April 6.
There are a number of different types – including the Lifetime Isa, which is good for those saving to buy a first property, and a Stocks & Shares Isa, a great option for those willing to take more risk.
But cash Isas are the most common type, and they’re available to everyone in the UK aged 16 or over.
Unfortunately, cash Isas have some of the lowest interest rates going at the moment, so there’s not much appeal to having one.
Easy-access Isas allow you to withdraw money whenever you like without incurring a penalty. They’re a good option if you want the freedom to dip into your savings if you need to.
According to MoneySavingExpert, the top-paying Isa at the moment offers interest of 1.31%.
If you open the account Cynergy Bank and save £100, you’ll earn interest of £1.31 after a year.
Marcus and Saga both pay 1.3% but you can’t transfer in other savings, so you’ll have to start from scratch.
Fixed rate Isas
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If you’re willing to tie your money up for a bit longer, you can earn more interest.
Fixed-rate Isas lock your money away for a set amount of time. You will be able to access your cash if you need it, but there’s a penalty for doing so and it usually means you lose your interest.
The top-payer is Virgin Money with interest of 1.9% if you lock your money up for one year, and 2.25% if you tie it up for two years.
The longer you fix for, the better the interest too. The top-paying five year fixed rate Isa is from UBL UK and pays 2.6%. If you saved £100 into this account, after a year you’d have £102.63
Bank bonuses
It’s not just Isas that can boost your bank balance. Various banks pay you to switch to them.
Five banks currently offer switch bonuses, and among the most generous is HSBC, which gives you £170 free cash for opening an account.
There’s no monthly fee on the account, but you’ll need to pay in at least £1,500 within 60 days in order to claim the bonus.
First Direct also pays £170 – you’ll get £20 when you open an account, and the rest if you make a full switch.
To switch, you just need to open your new bank account, and give it your old bank details – and the hard work will be done for you.
Always check the terms and conditions though, sometimes you won’t qualify for the switching bonus – for example, if you don’t pay in a minimum amount or you’ve been a customer before.
Regular savings accounts
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If you’re looking for a regular bank account with interest, you can earn cash by depositing money each month into certain accounts.
First Direct offers 3.5% for one year, and you can pay in up to £300 a month.
Your interest rate will be slashed to just 0.1% if you try to access the cash before the year is out though.
With NatWest and RBS you can earn 3.3% interest but can only pay in a maximum of £150 a month.
Santander and Nationwide‘s regular savings accounts both pay interest of 2.5% on up to £200 a month.
And don’t forget to check out standard bank accounts too. Newbie bank Chase is paying interest of 1.5% on balances up to £250,000.
However, it’s so popular there have been reports of customers waiting for weeks to even open an account.
Virgin Money M Plus pays 2.02% but only on balances up to to £1,000, and Nationwide pays 2% for the first year.
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