Savers may want to get their skates on to benefit from the top-paying savings accounts, with several providers having raised rates in response to rising interest rates.
If you’re lucky enough to have some spare cash available, then now’s a good time to ensure it’s working as hard as it possibly can for you. Conflict in the Middle East has contributed to higher inflation and the first interest rate hike in more than three years in November. The base rate now sits at 4%
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?
With interest rates currently still higher than inflation, which rose to 3.5% in the year to September 2026 and is expected to tick up further in coming months, savers are still in a relatively strong position – for now, at least.
Kevin Brown, savings specialist at Scottish Friendly, said: “A higher base rate from the Bank of England might feel like good news for savers if it translates into more attractive rates on saving accounts. However, any potential benefits are best thought of in the wider context of the imposing financial pressures many currently face.
“Inflation accelerated to 3.5% in September and continues to erode the purchasing power of money held in cash. And for households already coming to terms with higher energy bills and other living costs, any gain from improved savings rates risks being overshadowed by the growing burden that is the cost of living.”
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.
Top 5 Easy Access Accounts
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?
Top 5 Easy Access ISAs
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
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.
Savers with sizeable pots must still pay close attention to their Personal Savings Allowance (PSA). Higher rate taxpayers only have a £500 personal savings allowance before they must pay tax on the interest they earn – half that of a basic rate taxpayer – while additional rate taxpayers have no allowance at all. This creates a growing tax headache as interest income rises, which is why a tax-efficient savings strategy is a must.
You can find out more about the Personal Savings Allowance in our article What is the Personal Savings Allowance? and about ISAs in our guide Everything you need to know about ISAs.
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, although remember that returns aren’t guaranteed. Find out more in our article Investing – the basics and Savings accounts or shares – which is the best option?
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