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The Best Savings Accounts of 2020

By: Kate Anderson | Updated: 18th September 2020

Savings rates have been at historically low levels since the financial crisis of 2008. Which makes it all the more important to shop around for the best rates. Our team has scoured the market to bring you a list of the top savings account options.


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We’ve brought together the best of all savings account types. So whether you’re looking for easy access, fixed savers or ISAs, we believe we have the best of the bunch here. Here are MyWalletHero’s picks for the best savings accounts:

Great for: Earning interest with flexible access
5 stars question mark
Saga logo
  • Interest Rate (AER):

    0.75%
  • Account Type:

    Easy Access
  • Account Minimum:

    £1
  • Account Maximum:

    £100,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • Bonus 0.20% rate for the first 12 months
  • Start saving with as little as £1
  • Flexible account that allows easy access to your funds

what we like

  • Bonus 0.20% rate for the first 12 months
  • Start saving with as little as £1
  • Flexible account that allows easy access to your funds

WHAT YOU NEED TO KNOW

  • Bonus 0.20% rate for the first 12 months
  • Start saving with as little as £1
  • Flexible account that allows easy access to your funds

DISCLAIMER

Great for: Competitive fixed rate interest
5 stars question mark
Saga logo
  • Interest Rate (AER):

    0.70%
  • Account Type:

    1 Year Fixed Rate
  • Account Minimum:

    £1
  • Account Maximum:

    £100,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • Minimum deposit £1
  • Maximum account balance £100,000
  • Deposit must be made within 14 days of opening, but can be done via unlimited payments
  • It's possible to close the account and access funds early (a fee applies)

what we like

  • Competitive interest rate
  • You can close account early (a fee applies)
  • Allows multiple deposits within the first 14 days

WHAT YOU NEED TO KNOW

  • Minimum deposit £1
  • Maximum account balance £100,000
  • Deposit must be made within 14 days of opening, but can be done via unlimited payments
  • It's possible to close the account and access funds early (a fee applies)

DISCLAIMER

Great for: Competitive fixed rate interest
5 stars question mark
Paragon logo
  • Interest Rate (AER):

    1.10%
  • Account Type:

    3 Year Fixed Rate
  • Account Minimum:

    £1,000
  • Account Maximum:

    £1,000,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • Minimum deposit £1,000
  • Maximum total balance £500,000
  • Your total sum must be deposited within 28 days of application via one payment
  • Can be opened as a single or joint account
  • Interest can be paid monthly or annually

what we like

  • Can be opened as a single or joint account
  • Offers monthly or annual interest payments
  • Competitive interest rate

WHAT YOU NEED TO KNOW

  • Minimum deposit £1,000
  • Maximum total balance £500,000
  • Your total sum must be deposited within 28 days of application via one payment
  • Can be opened as a single or joint account
  • Interest can be paid monthly or annually

DISCLAIMER

Great for: Competitive fixed rate interest
4.5 stars question mark
Paragon logo
  • Interest Rate (AER):

    1.20%
  • Account Type:

    5 Year Fixed Rate
  • Account Minimum:

    £1,000
  • Account Maximum:

    £500,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • Minimum deposit £1,000
  • Maximum total balance £500,000
  • Your total sum must be deposited within 28 days of application via one payment
  • Can be opened as a single or joint account
  • Interest can be paid monthly (1.59%) or annually (1.60%)

what we like

  • Can be opened as a single or joint account
  • Offers monthly or annual interest payments
  • Competitive interest rate

WHAT YOU NEED TO KNOW

  • Minimum deposit £1,000
  • Maximum total balance £500,000
  • Your total sum must be deposited within 28 days of application via one payment
  • Can be opened as a single or joint account
  • Interest can be paid monthly (1.59%) or annually (1.60%)

DISCLAIMER

Great for: Competitive interest on savings
4.5 stars question mark
Vanquis Bank Savings logo
  • Interest Rate (AER):

    0.95%
  • Account Type:

    2 Year Fixed Rate
  • Account Minimum:

    £1,000
  • Account Maximum:

    £250,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • Minimum deposit £1,000
  • Maximum total balance £250,000
  • Open as a sole or joint account
  • Deposit must be made within 30 days of opening via a single payment
  • Annual or monthly interest options available

what we like

  • Competitive interest rate
  • Can be opened as a sole or joint account
  • Annual or monthly interest options

WHAT YOU NEED TO KNOW

  • Minimum deposit £1,000
  • Maximum total balance £250,000
  • Open as a sole or joint account
  • Deposit must be made within 30 days of opening via a single payment
  • Annual or monthly interest options available

DISCLAIMER

Great for: Competitive interest on regular monthly savings
4.5 stars question mark
First Direct logo
  • Interest Rate (AER):

    2.75%
  • Account Type:

    Regular Saver
  • Account Minimum:

    £25
  • Account Maximum:

    £3,600

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £300 each month - up to £3,600 per year
  • If your regular monthly payments are less than the £300 max, you can carry your allowance over and pay more in later months
  • You can change your standing order amount at any time
  • Only available to First Direct Current Account holders
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the standard savings interest rate

what we like

  • Highly competitive interest rate
  • Save between £25 and £300 each month
  • You can change your standing order amount at any time

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £300 each month - up to £3,600 per year
  • If your regular monthly payments are less than the £300 max, you can carry your allowance over and pay more in later months
  • You can change your standing order amount at any time
  • Only available to First Direct Current Account holders
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the standard savings interest rate

DISCLAIMER


How do you compare savings accounts?

In the current climate it can be hard to really make your savings work for you. Which is why it is important to compare savings accounts where possible in order to find the best deal available. But what features should you really be looking at? Here’s our top four things to look at when comparing accounts:

Interest rates – The interest rate will dictate the amount of money you can earn from your savings. The main thing to bear in mind when looking at interest rates is to try to pick an account which has a rate that is higher than inflation. If inflation is higher than the interest paid on your savings account, this basically means that the value of your money is falling over time.

Other things to consider when looking at interest rates is whether you can lock away your money for a certain period of time in order to access a potentially higher rate. Accounts that limit access to your money tend to carry higher rates of interest.

Also, try to look to see if there are accounts with an introductory bonus included in the interest rate. This could help boost your interest return in the short-term, and if you are savvy, you could then move your money to another account once the introductory rate has ended.

Access – A key feature of any account you choose is how you will be able to access your money. Do you need to be able to access your money quickly? Or do you have a lump sum that you can put away for a year or more?

Typically the higher interest rates are reserved for savings products that limit access, such as fixed-rate bonds or notice accounts. It is usually the case that there will be a limit on how many withdrawals you can make and potentially penalty charges if you do withdraw your money before the end of the term.

However, with instant access accounts you will be able to access your money whenever you like. But the likelihood is that your interest rate will be lower compared to accounts that limit access.

Minimum and maximum deposits – Some accounts require a minimum deposit in order to be opened. So try to make sure that you have the required amount available if this applies to the account you are interested in. Similarly, other accounts carry a maximum deposit limit. Consider what it is you are looking to save, and therefore whether or not the account suits your needs.

Account management – Are you happy with an online savings account? Or would you prefer to be able to talk to someone face to face? How your account is managed can also be a deciding factor when choosing a savings product.

You may find that products with online access only offer slightly higher rates. But ask yourself whether or not this would suit the way you conduct your finances. And whether it would be worth it in order to access the best possible rate.

Who can open a savings account?

Anyone can open a savings account in this country as long as you are a UK resident. Most savings accounts are designed for adults, so you may find age restrictions attached to some. For these you will need to be 16 or 18 in order to apply.

However, there are savings accounts available specifically for children. As a general rule these can be opened by parents for any child up to the age of 18. However, if you are a grandparent you will still be able to open an account for them as long as you have the correct documentation – such as the child’s birth certificate.

It is up to each provider to set the rules for their accounts. You may find that some banks restrict their highest paying savings accounts for customers who have a current account with them. Or that smaller building societies restrict their accounts to people who live in their area.

When you have chosen a savings account, it may be worth checking the eligibility criteria before making your application.

How safe are savings accounts?

If you are wanting to protect your savings then try to have a maximum of £85,000 saved with each financial institution. Following the financial crash of 2008, all UK-regulated current or savings accounts and cash ISAs in banks, building societies and credit unions are covered by the Financial Services Compensation Scheme (FSCS).

Basically this means that you can recover your savings up to the sum of £85,000 if a bank, building society or credit union was to fail. The key thing to understand is that this is £85,000 per financial institution. So if you have savings that amount to more than this maybe try to spread them out across different accounts. If you hold a joint account, then this accounts as half each. So combined you will have £170,000 protected.

The FSCS will also temporarily protect savings up to £1m after a ‘life event’. So if you have sold your home (not buy-to-let or second home), received an inheritance, a redundancy payout or compensation payout, your savings will be protected for a six month period if your savings provider goes under.

Can I have more than one savings account?

You can absolutely have more than one savings account. The only exception to this is that you can only save into one ISA every tax year.

In fact, there are several advantages to having more than one savings account:

  • You can protect more of your savings. As mentioned, the Financial Services Compensation Scheme protects savings up to £85,000 per financial institution. So if your savings are above the threshold, it could be a good idea to spread it over several banks or building societies in order to make sure the full amount is protected.
  • You may want to have a range of different types of accounts. For example, you may want an easy access account to act as an emergency fund. And you may also want a fixed-rate account, which means that you have a sum of money locked away for the future which is earning you a higher rate of interest.
  • You can have clear savings goals. Having multiple savings accounts allows you to have multiple savings goals, which are kept separate from each other. So you can have a pot set aside for Christmas, or a holiday, or even your annual tax bill.

When can I take my money out of a savings account?

The access you have to your savings depends on what type of account you choose. Let’s take a look:

Instant access – Instant access or easy access accounts allow you to deposit and withdraw money whenever you like. These accounts typically have a lower interest rate than others, but are good if you think you will need to dip into your savings.

Fixed – With these types of accounts you deposit your money for a fixed term (1 to 5 years). If you want to take your money out before the end of the term you may be faced with a penalty charge. However, the interest rates are typically higher than instant access accounts.

Notice – A notice account requires that you give a certain amount of notice (eg. typically 30-180 days) before you access your money.

Regular savings account – A regular savings account requires you to put money away each month with interest paid yearly. They typically limit the amount of withdrawals you can make during the term of the account.

How much should I be saving?

The amount you are able to save depends on your personal circumstances. When it comes to personal finance, it is often best to pay off any outstanding debts before you start committing to saving. This includes debts such as credit cards or loans.

However, if you are in a position to put some money aside then it is worth looking to build up at least three months of essential outgoings in an emergency fund. This is just so you are prepared for the unexpected, like a broken boiler or if you lose your job.

How much you can save each month will depend on what you can afford. As a general rule, saving smaller, regular amounts will be more effective than saving larger amounts now and then. This is because this helps you to develop a savings habit, and makes sure that you aren’t overcommitting yourself.

Frequently asked questions

How do you compare savings accounts?

It is always worth comparing savings accounts in order to try to find the best one for you. You’ll be able to do this on most financial comparison sites in the UK. But it’s important to know what you should be comparing. Here’s our top four things to look at to find the best account for you: interest rates, access, minimum/maximum deposit and account management.

Who can open a savings account?

Anyone can open a savings account in this country as long as they are a UK resident. Most savings accounts are designed for adults, so you may find some age restrictions. But there is a large range of accounts also available specifically for children.

How safe are savings accounts?

Savings are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per financial institution. So if you have savings that are more than £85,000, it may be a good idea to spread them out over several institutions in order to make sure you don’t suffer any losses if the banks fail.

Can I have more than one savings account?

Absolutely. There is nothing stopping you from having more than one account and in some ways it is an advantage. You can protect more of your savings, have accounts with differing levels of access and have multiple accounts for separate savings goals. The only exception is that you can only save into one ISA every tax year.

When can I take my money out of a savings account?

When you can take your money out of a savings account depends on the level of access your chosen account has. To learn more about the different types of savings accounts and their accessibility take a look at our savings guide.

How much should I be saving?

How much you can save depends on your personal circumstances. However, as a general rule it is worth building up at least three months of essential outgoings in an emergency fund. This is to cover things such as unexpected repairs or if you were to lose your job.