Savers may want to get their skates on to benefit from the top-paying savings accounts following February’s base rate cut.
If you’re lucky enough to have some spare cash available, then in recent years you’ll have benefited from some of the highest savings rates seen since 2008. Savers can earn as much as 4.55% interest on some short-term fixed rate bonds, but deals are starting to disappear as rates are expected to continue to fall over the long term.
Both fixed and variable savings rates crept upwards last year, following 14 consecutive hikes in the Bank of England base rate, but are easing after the base rate was cut twice in 2024, in August and November and then again in February and May 2025. Interest rates currently stand at 4.25%.
Here, we explain what sort of returns you can currently expect to earn on your savings and where to find the top-paying accounts.
How much interest can I earn on my savings?
The highest rates for easy access accounts are currently around 5.07%, with the top rates on the best five-year fixed-rate bonds sitting at 4.48%.
With interest rates currently still higher than inflation, which eased to 2.6% in the year to March 2025, savers are still in a relatively strong position – for now at least.
Mark Hicks, head of savings at Hargreaves Lansdown said: “Given that markets now expect two or three more rate cuts for the remainder of the year, savings rates are likely to continue trending downwards in the months to come, and fixed rate deals above 4.5% may not be around for much longer.
“For savers, this means keeping an eye on your savings rate, and being prepared to switch. You need to keep your emergency fund in easy-access savings, which are likely to drop. However, some banks will be in more of a hurry to cut rates than others, so you could more than double the rate from a pedestrian high street giant by shopping around among online banks and savings platforms.
“For money you don’t need for longer, this is a decent opportunity to consider fixed rate savings. Fixed rate deals, which guarantee the rate for a specific period – from a couple of months to five years – will let you lock in a rate for the duration. These have come down from the peak, but you can still make around 4.5%, and as easy access deals get less generous, these deals will look increasingly attractive. It means anyone who has money they don’t need for a fixed period of a few months or longer should consider tying it up for a better rate.”
What are the top savings accounts?
With living costs still high, it’s more important than ever to ensure you’re earning as much in interest as possible on your cash savings.
Easy-access savings accounts usually enable you to take your money out whenever you want, without any loss of interest. It’s generally considered wise to have three to six months’ worth of essential spending in an easily accessible account to cover any unexpected costs, such as car repairs or a boiler breakdown. You can find the current best deals in our article Best instant access savings accounts revealed.
Alternatively, you may decide to save into a cash ISA for tax-free interest, if you aren’t using this year’s £20,000 annual allowance to invest elsewhere. Read more in our article Best cash ISA rates – which cash ISAs pay the most interest?
Boost your savings with 4.26% AER1 tax-free
Make your money work harder this year with an OakNorth 12-month Fixed Rate Cash ISA. Remember, a Fixed Rate Cash ISA2 is tax-free, which means you won’t pay any tax on the interest you earn.
1Annual Equivalent Rate correct as of 2nd May 2025 and subject to availability. Terms and conditions apply. 2The annual ISA allowance is £20,000 per tax year (6 April to 5 April). ISA and tax rules apply.
Fixed-rate bonds usually pay more than easy access accounts, but you can’t generally withdraw money from this type of savings account before the term ends without penalty. If you need to get your hands on your money urgently, you can close the account, but more often than not this will mean some charges, such as loss of interest. However, you will have the security that the interest rate will remain the same until the end of the account term. Find more information about these accounts and the top rates in our article Fixed rate savings bonds explained.
Top 5 Fixed Rate Accounts
by Raisin UK
Interest
Term
Interest on £5,000
Bank
Deposit Guarentee
Details
What should savers do?
See if you can get a better return on your savings elsewhere. Check savings websites such as Raisin, or price comparison sites such as Moneyfactscompare or GoCompare to see if you can find a higher interest rate to move to.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, said: “Savers should stay mindful of their Personal Savings Allowance (PSA), which has remained unchanged since its launch in 2016, creating a headache for some savers during the era of higher savings rates because more people found themselves paying tax on the interest they earn. Easing interest rates won’t erase that problem entirely. Many savers with the top deals can still make a decent return on their cash savings, putting them at risk of breaching their PSA.
“While many savers are still making a real return, once inflation is factored in, it is the post-tax ‘net return’ on that cash that they really need to pay attention to. Increasing numbers of taxpayers are being dragged into higher rates of tax as their incomes increase, a result of most personal tax thresholds remaining on hold until at least 2028, so for taxpayers in the higher bands in particular, real returns net of tax may only be marginally positive even on the most competitive accounts.
“This is where a tax-efficient savings strategy comes into its own, such as taking advantage of your tax-free ISA allowance and topping up pensions. ISAs allow savers to stash up to £20,000 this tax year and to grow their wealth and withdraw investments when they want without fear of a tax bill at the end. Remember, this this is a ‘use it or lose it’ allowance because you cannot carry it into the next tax year. Plus, with the Government now mulling ‘ISA reforms’ – particularly to the Cash ISA allowance though the Stocks & Shares ISA could also be line for changes, as it looks to achieve the right balance right ‘between cash and equities’ – savers might want to act fast to ensure they can maximise existing rules while they are still in place.”
You can find out more about the Personal Savings Allowance in our article What is the Personal Savings Allowance? and about possible changes to ISAs in our guide ISA changes in 2025: what you need to know.
If you already have plenty of cash savings set aside that you can access at any time, you may want to consider investing for long-term gains. After all, savings rates are not high enough to keep up with rising living costs. Meanwhile, stock markets have fallen substantially this year, which could make it a good time to be invested to benefit for the long term. Find out more in our article Investing – the basics and Savings accounts or shares – which is the best option?
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