Top Savings Accounts 3.2% easy access or 3.6% for a year

Base rates are at an historic low but it's still possible to make saving pay. The best buys pay up to 3.2% easy access, and if you can lock cash away in a fixed savings account, you can get up to 4.7%.

This daily updated step-by-step guide includes best-buy easy access and fixed-rate accounts, the savings widget to show how much you'd earn, plus how to compare and choose in safety.

Where to start saving

Not everyone should just grab the top paying savings account - often you can use spare cash more profitably, depending on your circumstances...

If you answered yes to a number of these, to see how they all fit together read the full Starting Saving guide. If you've checked all of the above, and have decided you want somewhere safe to stow your cash, then you're in the right place...

A savings account is a just place to dunk an unlimited amount of unused cash, to earn a higher rate of interest.

Savings accounts have less functionality than normal day-to-day accounts offering neither cheque books nor, with a few exceptions, cash cards.

How safe are your savings?

Bank collapse was once easy to dismiss, then the credit crunch and global market turmoil hit. After the calamities that hit Northern Rock, Bradford & Bingley, Icesave and Kaupthing, every sensible saver should ask "is my money safe?".

The answer is simple. Provided the money is in a UK regulated bank or building society account, it's protected under the Financial Services Compensation Scheme (FSCS) meaning...

up to �85,000 per person, per financial institution is guaranteed.

Sadly the exact rules about what counts as 'UK regulated', the links between institutions, and joint accounts make it more complex. For full info on the rules see the detailed Are Your Savings Safe? guide.

For large savings, to keep it 100% safe, simply spread it in a number of accounts, not putting more than �85,000 in each. In fact, consider spreading money even if you've under �85,000, as if you needed to claim compensation you wouldn't have instant access to your cash.

This guide and best buys

It's impossible to pick "which bank is in trouble?" Even the great names of world banking like Goldman Sachs and Merrill Lynch have been in trouble. Therefore our stance is to not try to judge that, but suggest you rely on the UK savings guarantee. So we report all top rates regardless, but include any 'protection oddities'.

What to watch with savings

While savings are the simplest of products, providers still manageto throw a few wobblers into the mix. Watch out for...

• Introductory 'bonus' rates
  
  These are temporary interest hikes to attract new customers. They are no problem for active consumers, as you can shift the cash to a better payer as soon as the bonus ends. Always diarise to ditch and switch when the bonus finishes.
  
  Since the base rate dropped to an historic low, bonus rates have shed some of their negative connotations. They effectively act as a 'minimum rate guarantee' during the introductory period, promising you at least some interest.
• Suck, slap and flog naming
  
  Some banks suck you in with a high rate, then later slap the rate down, and try to flog another similarly named account so you think you're still earning decent interest. Always know your account's exact name and the interest rate it pays.
• Easy access, instant access, no notice & notice accounts
  
  It's also crucial to look at what access you have to your money, as there are a number of different phrases. Easy access refers to both instant access (where you can do an immediate cash withdrawal via a branch) and no-notice accounts (where, as it's an internet/phone account, in practice it can take a few days to get the cash in your hands).
  
  However some accounts require you to give notice to withdraw money, perhaps of up to 180 days which means your cash is locked away (often unless you pay a penalty to withdraw it).
• Withdrawal limits or penalties
  
  Some accounts limit the number of withdrawals you can make a year. Others will not pay interest in any month a withdrawal is made. This can have a massive impact, eg, you withdraw �100 but lose interest on all the �100,000 in your account for the whole month.
  
  The terms vary per account, so always know what taking out your cash will cost you.
• You pay tax on savings
  
  Unless your combined earnings and savings interest are under the �7,475 personal allowance (more for over 65s see the income tax checker) you'll pay tax on your savings interest apart from cash ISAs.
  
  Interest rates are usually quoted without tax, but for basic rate taxpayers 20% of the interest earned goes to the taxman; for higher rate taxpayers it's 40% and 50% for top 'additional rate' taxpayers.
• Quoting different interest rates
  
  Banks quote one of two different interest rates. The gross rate is the flat amount paid; while the Annual Equivalent Rate (AER) takes into account interest compounded over the year. Check which rate you're being quoted and compare like with like. For a detailed explanation read about the difference between AER & Gross interest.

The UK's Top Rate Savings

Here's a full comparison of the best buy easy access savings accounts. These accounts tend to be no-frills, so the rates are good but customer service may be limited. Use the Savings Calculator to see how much you'll get after tax, plus occassionally cashback websites may give you a sign-up bonus.

However you may be able to earn even more - if you've not used your tax-free allowance this year, first check out top cash ISAs and if you're happy to lock your cash away see the Top Fixed Savings,

The best buy variable rate accounts...

All these deals are variable rate, so you need to monitor them to ensure the rate doesn't drop (switch away if it does). Don't just plump for the highest rate, read the pros and cons then pick one that suits.

Unless stated, all have full protection under the �85,000 per person, per institution rules. Though do check how institutions are linked and other notes in the safe savings guide.

Easy access

Top 'clean' easy access accounts

Specialised Alternatives

Fancy looking locally?

All the above rates are available to anyone, yet some small building societies occasionally offer special rates to people who live in the local area, or to existing members; it's always worth checking yours.

Top ethical easy access savings

Ethical savings accounts - where providers behave ethically in terms of the environment, human rights and more - have jumped in popularity. Our main focus always is telling you the top savings rates, but to match demand we've worked with Ethical Consumer magazine to list the top-paying accounts that also rate highly on their ethics.

Fixed rate savings

Most savings accounts are variable, meaning the rate can change both with the Bank of England's base rate and as providers change their competitive stance - so to keep earning well you need to actively monitor your accounts. Yet there is an alternative...

Fixed rate savings give a guaranteed rate for a set period, but you can't take your money out during that time.

Therefore, they're only suitable for those who are happy to lock cash away for the entire term.

However, this means you can bag some decent rates, with banks after your cash for longer, as with fixed rates they get surety that you won't want it back until a defined time, thus allowing them to plan their lending strategies better.

How long to fix for?

The longer you fix for, the more you are RISKING the fact that an unpredictable future means this could be a bad choice.

If interest rates were to increase rapidly, you would've lost the flexibility to ditch and switch to a better payer. As at Nov 2011, pundits were predicting the base rate would stay low for another year or so - but no one can know for sure, so it's important to go into fixed rate savings with your eyes open.

Another thing to consider is if the savings safety status of the institution changes, it'd be more difficult to get your cash out - though some merged banks in the past have allowed special dispensation for these balances.

Top Fixed Rate Savings

Some fixed accounts require you to set up a 'feeder' account, normally a non-fixed savings account, in order to get the money in. If that's the case, it's often speedier to do it at a bank you already have an account with.

Top ethical fixed savings

Ethical savings accounts - where providers behave ethically in terms of the environment, human rights and more - have jumped in popularity. Our main focus always is telling you the top savings rates, but to match demand we've worked with Ethical Consumer magazine to list the top-paying accounts that also rate highly on their ethics.

Do you live off savings interest?

When using fixed rate savings, you won't usually get paid monthly interest. Therefore many who rely on interest earned from savings as an income stream don't fix, even though they're paying higher rates. Yet there's a work-around.

Here's an example (ignoring tax for ease of explanation)...

This way you can grab the higher fixed rate accounts, but retain access to enough cash in the meantime. Remember though, if you might need to get at the whole lump within the fixed term, this trick won't help and fixed rates may not be for you.

Guaranteed good rates

An alternative to fixing is to get an account that gives you a rate guarantee for a certain period if you lock your cash away - that way you know exactly what the deal will be. There are two types; accounts linked to inflation (see the Inflation Linked Savings guide) and those which track base rate, like the one below.

Top Small Business Savings Accounts

If you have a business current account the chances are it pays roughly 0% interest. So any businesses that have cash stored, even just to pay the taxman, are missing out on interest.

Who needs a business account?

There are two main types of small business structure; whether this works for you depends on yours.

• Sole traders
  
  While you can open one of these accounts, there's little point. Normal savings accounts pay far higher rates, so you would be better off opening an account in your own name and putting your business's cash in there.
• Limited companies.
  
  This is the prime reason for small business accounts. For limited company business owners to move money into their own name requires a form of payment from the company to the individual which will trigger a tax liability. Therefore business savings accounts are a way of earning interest on money in the company's name.

Savings Safety

If you have a company with turnover under a million pounds, money in the bank has the same �85,000 per person (company) UK Savings Safety protection as private individuals. However if you have larger turnover you're not protected.

Many of the accounts are specifically for small businesses; if you're larger do check there are no turnover restrictions before applying for an account.

For the current top rates, read the Small Business MoneySaving guide.

The Savings Calculator

Simply enter all the details, remembering to choose the level of tax you pay. For the most accurate answer use the AER (Annual Equivalent Rate) which should be listed on your statement. Obviously as most accounts' interest rates are variable, the calculations will change if the rate does, but it should give you a good idea.

The calculator assumes you put money in at the beginning of each month, so if this isn't how you do it, the answers will be ever-so-slightly out. If you don't make regular deposits but put lump sums in, figure out the monthly equivalent for a rough answer. Feel free to play with the results to see how it impacts your savings.

How much do you need to save? £

How much do you already have? £

How much can you save a month? £

What�s the interest rate? (before tax) %

How much tax do you pay? No Tax Basic Rate

Higher Rate Additional

How much do you need to save? £

How much do you already have? £

What�s the interest rate? (before tax) %

When do you need it by? years and months time.

How much tax do you pay? No Tax Basic Rate

Higher Rate Additional

How much do you already have? £

How much can you save a month? £

What's the interest rate? (before tax) %

How far ahead do you want to look? years and months time.

How much tax do you pay? No Tax Basic Rate

Higher Rate Additional

How inflation hits your savings

To really know how well your savings are doing, you have to look at it compared to the rate of inflation. Inflation is the measure of the rate at which prices increase, so if savings don't beat inflation after tax, they're losing you money.

Ensure your savings aren't losings...

A savings account that pays less than the rate of inflation is eroding your wealth. An example using simple numbers should help...

Imagine inflation is 5%

... things costing �1 this year will then cost �1.05 next year

You have �1 in a savings account at 2% interest after tax

... by next year it will have grown to �1.02

Therefore saving's reduced your spending power by 3p/pound

... it's a losings not a savings account.

Of course sometimes prices drop - as has happened in 2009 - and you get negative inflation, known as deflation. This can sometimes be positive for savings - read about the Impact of deflation on savings.