Whether you're looking for a simple instant-access account, or a five-year fixed bond, Ruth Jackson outlines the best savings accounts on the market at the moment.
If you are want to be able to access your funds at the drop of a hat you need an instant access savings account. The best of the bunch is West Bromwich Building Society's WeBSave Easy Access 2, which pays 3.06% until 31/8/2012 after that it drops to 2% so be prepared to switch accounts again. There are catches with this account though, the minimum investment is £1,000 and you can only make three penalty-free withdrawals a year.
For more flexibility and a lower minimum deposit look to the Post Office's Online Saver (Issue 4), which offers a rate of 3.01% for the first year (after which it drops to 1.65%).
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Notice accounts offer better interest rates than instant access accounts in return for you giving the bank a bit of warning before you withdraw you money.
In return for 90 days' notice, Whiteaway Laidlaw Bank offers a rate of 3.30% on its Premium Notice Account. The minimum initial deposit is £1,000.
If you are prepared to lock up your money for six to 18 months you can get an even better rate of interest. (Are you starting to sense a theme yet? The longer you lock up your money the more interest you will get.)
Whiteaway Laidlaw Bank offers a rate of 3.51% on its one year bond but you will have to deposit at least £5,000.FirstSave has a rate of 3.5% on its One-Year Fixed Rate Bond 15th Issue with a minimum deposit of £1,000.
Those prepared to lock up their money for two to three years will get even better interest rates.
The best available is the Post Office's Online Bond Issue 5. Hand over at least £500 for three years and you will get a rate of 4.21%.
Top of the two-year bond best buys is Bank of Ireland UK with its imaginatively titled Web Bond which pays 4%. But you need a minimum deposit of £500.
For the very best interest rates you need to go for a five-year bond. Then you would get a rate of 4.75% with Whiteaway Laidlaw Bank'sFive Year Fixed Term Deposit Issue 1 if you deposit at least £5,000. But with the Bank of England base rate still at a record low of 0.5% it can only go up and will do over the next five years. So I wouldn't recommend locking up your money for five years as the chances are your interest rate will be overshadowed when the base rate finally starts to rise.
If you are looking to build up some savings go for a regular savings account. These accounts offer higher interest rates but limit how much you can put in to a monthly amount. HSBC is top of the pops with a jaw-dropping rate of 8% but you do have to be an existing customer to get that.
For everyone else there is West Bromwich Building Society's Fixed Rate Regular Saver which pays 4.1% for a year as long as you make ten deposits of at least £10 over the year.
This article was last updated on 4 August 2011
Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance.
Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.
Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.
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