Savings accounts are just bank or building society accounts where you put money in, and earn interest on your savings.
It's different from a current account because you can't do things like withdraw cash, spend on a debit card or pay bills. It's just a way to save your money, while getting a return on your savings.
The best savings accounts tend to offer higher interest rates, as the higher the interest rate offered, the better it its as this means you'll earn the most from your money.
Anyone who is 18 or over and is a UK resident can open a savings account can open a savings account. If you're 16 years old, you can open a cash ISA.
Choosing the best savings account can be confusing. There are lots of different types to choose from. Our table shows many of the savings accounts you can get online, over the phone or by visiting a branch.
When you compare savings accounts you'll see some exclusive savings accounts. These are only open to banks' existing customers. They give better savings incentives, such as higher interest rates.
It's also important to keep in mind that, there's never one best savings account as every one likely has different needs and requirements. Although usually, accounts that offer the best interest rates are the best deals, that isn't always the case for everyone.
Before you start looking for the best savings account for you, think about what type of savings account you'll need. There are lots of different types.
These keep your money in a bank or building society. They might not always give the best savings account rates but they don't put your funds at risk, because they don't invest your money in the stock market. These accounts include
Instant access accounts: These let you withdraw cash whenever you like.
Easy access accounts: Your withdrawals can take up to a week to process, but the flexibility means you won't get the best savings interest rates.
Notice accounts. You have to give notice to withdraw cash or you'll pay a penalty, but you'll get some of the best savings account interest rates out there.
Regular savings accounts: These generally require you to pay into the account every month.
Fixed rate bonds: You tie your savings up and can't access them until the end of the set term. But if you'll earn a higher return than your usual savings accounts.
Sharia savings accounts: These are offered by Islamic banks and pay you a regular 'profit' instead of interest, which is against Islamic law.
These let you save money, without paying tax on any interest you make. They'll often offer you some of the best savings interest rates too. But remember that you're restricted on how much you can pay in each tax year (6 April - 5 April). These accounts include:
Help to Buy ISAs.
These are designed specifically for children. They can be opened by a parent or guardian on behalf of your child. Children's savings accounts include:
Junior stocks and shares ISAs (junior investment ISAs)
Young person's savings plans
Children's instant access accounts
Children's notice accounts
Children's fixed rate bonds.
These are specifically designed for businesses, so they can save and earn interest on their spare cash. They include:
Business instant access accounts
Business fixed rate bonds.
These put your money at risk. But they give you the chance of a much larger return compared to savings accounts. They include:
Currently, with the Bank of England base rate being so low, high-interest savings accounts will be difficult to find. But that doesn't mean there aren't competitive rates out there.
Once the base rate rises again, you're more likely to see a return of high interest savings products to return to the market.
Most people can earn savings account interest without paying any tax on it at all.
If you're a basic rate taxpayer you can earn up to £1,000 of interest from a savings account without paying tax. If you're a higher rate taxpayer, you can earn up to £500 from savings accounts. Even with a very high interest savings account it's unlikely you'd earn this much on your savings.
This amount you can earn from interest is called your Personal Savings Allowance. It's in addition to the amount of tax-free interest you can earn from an ISA.
Only people with large amounts of savings need to worry about having to pay tax on the interest they earn from their savings. That's less than 5% of people.
Yes, you can. It means you can get the benefits from the most competitive savings accounts. It can be a good idea if you've got lots of money to save. You could put some into a one-year fixed that pays the best savings rates and some into an easy-access account, so you can get to the money easily if you need it.
Do your research and find the best savings accounts before you decide where to put your money. Remember, you could put it all into a savings account that gives you easy access to your money while you decide what to do.
Once you've found the best savings account for your needs, with the best interest rates you'll be able to open it either online, by phone or in branch. Some accounts have to be opened in specific ways.
To open it, you'll need ID and proof of your address so the bank can do its checks.
When you want to close your savings account, you just need to contact your bank. Some accounts need you to give notice. If you don't give that notice and take your money out, you could lose some or all of your interest.
Usually as much as you want, but some accounts restrict how much you can save. This guide explains how to manage each type of account.
Yes, but only if the account allows withdrawals. Some do not let you take any money out without a penalty, find out more in this guide.
No, you can choose how much access you have to your money by choosing the right savings account. This guide explains which accounts are available.
Yes, however you can only save into one ISA every tax year. Read this guide for more information on choosing the right savings account.
Yes, your finances are not checked when you open a savings account. If you need help choosing the right savings account, read this guide.
The Annual Equivalent Rate (AER) shows you how much interest you will earn over the course of a year taking into account compounding and other charges. The gross rate is the flat rate of interest that's actually paid.
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You do not pay any extra and the deal you get is not affected.