British savers may be missing out on maximising their financial investments by settling for less-than-ideal interest rates. Banks nationwide offer a plethora of savings account options, enabling customers to earn additional income each month.
However, the competitive rates offered vary from bank to bank, with only a select few surpassing others in relation to the Bank of England’s (BoE) base rate.
The BoE base rate, currently at 4.75%, is typically used by banks as a benchmark to determine loan charges and savings offerings. When choosing a savings account with the current base rate in mind, it’s crucial to remember that this rate could potentially change on February 6 when the Monetary Policy Committee convenes to decide whether to adjust it based on its evaluation of the UK economy.
Easy-access savings accounts
Easy-access savings accounts are one such option. These accounts allow customers to deposit money and accrue interest while the funds remain in the account.
A key benefit of these accounts is the flexibility they offer – customers can withdraw their money whenever they wish, although some accounts may impose a limit on the number of withdrawals permitted each month. MoneySavingExpert emphasises that these accounts are usually variable, meaning their rates can frequently fluctuate.
Here’s a rundown of some of the top savings accounts currently available…
Chip Easy Access – 4.85%
Chip Easy Access is currently offering a savings rate of 4.85%. However, it does come with the caveat of allowing only three withdrawals per year.
If more than three withdrawals are made, the account’s interest will drop by 1.1%. Additionally, the advertised rate includes a fixed rate bonus of 1.03% which will vanish after six months, suggesting that better offers may be available once this period ends.
More information can be found here.
Atom Bank Instant Saver Reward – 4.85%
Atom Bank Instant Saver Reward also offers a 4.85% rate. This easy access account rewards customers who refrain from making withdrawals, making it ideal for those who don’t plan on frequently accessing their savings.
If no withdrawal is made within a given month, the bank offers a 4.85% rate. However, if a withdrawal is made, the interest rate drops to 3.25%.
Further details can be found here.
Cash ISAs
Cash ISAs are unique savings accounts that offer the advantage of tax-free interest earnings, unlike easy-access savings accounts. However, customers are restricted to up to £20,000 in each tax year.
The current top Cash ISAs include…
Plum 5.01%
Plum’s Cash ISA offers a 5.01% rate, which includes a bundled deal of 1.22% for 12 months. It’s crucial to note that customers only receive 3.79% if they transfer into the account.
Moreover, the account’s interest rate will plummet to 2.5% if more than three cash withdrawals are made annually, setting a stringent limit. More information can be found here.
