Some of the best-paying savings accounts seen in over a decade have come to the market in the past week, but there is a catch.
New savings deals are now springing forth after banks came under significant pressure from the Financial Conduct Authority (FCA) to raise their interest rates. However, it is not as simple as walking into a bank and saying, “Here’s my money. Take it.” The catch is that some of the top-paying rates at some banks are ‘so far’ only being offered to existing customers.
Linked savings accounts are gaining attention as banks are offering top rates on the savings accounts that customers can open once they have a current account. This provides an incentive to either stick with your existing account or consider switching to make the most of the competitive interest rates.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “It is positive news to see more banks offering top offers on savings accounts. However, it’s important to recognise which offers are actually available to you.
“For easy access savings accounts, if you have a Santander Edge current account, then it’s worth exploring the Edge saver, which has a mighty 7% interest rate. However, this is only valid on balances up to £4,000, so it would work best for anyone who is keen to grow their savings pot throughout the year or has a small pot set aside that could be earning more interest. The account can be opened with just £1, and withdrawals can be made at any time, so this is certainly a flexible way to save.
“Alternatively, Virgin Money’s Private Savings Account offers an interest rate of up to 5.61% for its customers. But, there is a catch, as you’ll need to have a big savings pot – £1 million to be precise – to unlock this. The interest rate drops to 5.09% for balances from £0 to £499,999.
“If you would like to save little and often, a regular savings account can help. First Direct’s regular saver boasts one of the top interest rates in the market at 7%. This interest is fixed for 12 months, and you can save between £25 and £300 a month, which works out to £3,600 in a year. Remember, you’ll need to be a 1st account holder to get access to this account.
“If tax-free savings is something you want to explore, then Virgin Money has a one-year fixed cash ISA at 5.80%, which is available for anyone that has a current account with Virgin Money. It is a very competitive interest rate as it beats the top interest rate that is open to everyone – as this is from Shawbrook Bank at 5.78%.
“There are also some fixed-rate bonds which are only available to existing customers. Monzo offers a fixed-rate savings pot for customers with a current account at 5.60%. This is provided via Paragon, and you’ll need £500 as a minimum deposit.
“Whilst these rates are competitive, it’s always worth comparing savings accounts, as you may find a greater interest rate elsewhere.”
For more information and guidance on saving, including the best savings rates available today, visit https://www.money.co.uk/savings-accounts.
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