Choosing the best bank for your money isn’t always straightforward. From switching incentives and customer service to branch access, spending benefits and the interest rates on offer, there’s a lot to weigh up before deciding where your cash goes.

We look at the most and least popular banks in a separate guide, where Nationwide stood out thanks to its lucrative cash bonus, Fairer Share payments and top savings rates.

New analysis from Which? sheds light on the best and worst UK banks and bank accounts.

We look at the winners and losers, so you can see where your provider sits.

The best UK banks – how they rank

Which? asked thousands of customers how they would rate their banking providers. The data is based on several parameters, including ease of application and service in a bank branch, over the phone, online and app-based, and customer helplines.

In top place is Starling Bank, which is one of Which?’s recommended providers for the seventh consecutive year. The bank ranks highly in customer service and current account users are happy with its online banking service. Starling also launched a new AI banking tool that helps customers learn more about their spending habits.

Monzo is another one of Which?’s recommended providers. The challenger bank impresses customers with fee-free spending abroad, cashback on eligible spending and competitive savings rates, but falls short in customer helpline services.

First Direct is also in the top rankings – it’s one of only two banks which received full five stars for customer service and telephone banking. It also offers fee-free transactions abroad, and has an attractive bank switching deal.

Among more traditional high street staples, Nationwide ranks highly thanks to its extensive branch network. The building society has pledged to protect its branches from closures until at least 2030.

We look at the full results in the table below.

Source: Which? data based on a survey from September 2025. N/A means not enough responses for a star rating.

The best UK bank accounts – how they rank

Which? has analysed different bank accounts offered by bank and building societies. The parameters it has tested include interest paid, fee-free spending, interest-free overdraft and monthly fee.

Source: Which?. N/A means not enough responses for a product rating.

How to choose the best bank account for you

Despite the above findings, banking expert at Which?, Chiara Cavaglieri, says: “For too long, the biggest banks haven’t had to work very hard to keep customers, but challengers such as Monzo and Starling have quickly made their mark. They’ve forced bigger providers to innovate, and the result is a market where different providers shine in different areas. Even if you can’t bear to ditch your longstanding bank, think about what's important to you.”

With so many accounts to choose from, there are several factors to consider before you make a decision.

While a bank switching deal means customers have extra cash to cover the Christmas festivities, Rachel Springall, finance expert at Moneyfactscompare.co.uk, warns against making hasty decisions.

“An upfront free cash injection is a great sweetener, but consumers should only ever switch accounts if the new deal offers them better value,” she said, pointing out that while free cash offers don’t last forever, customers shouldn’t feel pressured to switch.

If you’re after spending perks and travel benefits, it might be worth checking out the best packaged bank accounts.

Springall said: “If customers opt into a packaged account, one that bundles in benefits, then they could find it to be more cost-effective than taking out separate insurance policies elsewhere, like travel insurance or mobile phone insurance.”

We look at whether travel insurance is worth it in a separate guide.

“There is a plethora of different benefits to choose from, such as high interest current accounts, those with a competitive overdraft tariff, as well as packaged accounts with integrated insurance plans or even accounts that reward savers or spenders,” Springall added.

“Those consumers who plan to make frequent trips abroad can also find accounts that don’t charge them for using their debit card in an ATM or in-store, so they can avoid paying out on transaction fees compared to a more traditional bank account.”

FSCS scheme: Are your savings safe?

The Financial Service Compensation Scheme (FSCS) protects your savings and investments if a financial services firm goes bust.

This includes current accounts, savings accounts, Shariah-compliant accounts, ISAs, and more.

On 1 December 2025, the FSCS limit rose from £85,000 to £120,000. It means that you will be covered for up to £120,000 if your money is with an FSCS-protected institution.

You can check which institutions are covered on the FSCS website.

In brief:

Cash ISAs from less well-known banks and building societies are offering interest rates higher than the current rate of inflation. When MoneyWeek researched rates in July 2026, it found the best easy-access account allowing penalty-free withdrawals offered 4.44% interest. Savers who don’t need to access their cash can earn 4.7% by placing it in a one-year fixed ISA, 4.65% in a two-year ISA and 4.62% in a three-year fixed ISA.

The best cash ISAs are currently offering inflation-busting rates of up to 4.7%. For savers who are happy to lock their money away for a set period, fixed-rate cash ISAs can be a good place to start.

Every adult in the UK gets a £20,000 tax-free Individual Savings Account (ISA) allowance each tax year. We've rounded up the best cash ISA rates currently on the market.

The best cash ISAs in July 2026

The best easy access cash ISAs

Easy access cash ISAs do what they say on the tin, letting you access your savings without penalty. You can currently earn up to 4.45% with this type of ISA.

The best one-year fixed rate cash ISAs

If you’re happy to lock your cash away without any withdrawals for a year, then you're guaranteed returns of up to 4.7% until your fixed term ends.

The best two-year fixed rate cash ISAs

If you have savings you’re happy to lock away for at least two years, you’ll find rates on cash ISAs of up to 4.65%.

The best three-year fixed rate cash ISAs

If you wish to lock away your cash for at least three years, the best fixed rate cash ISAs are offering up to 4.62%.

What you need to know about the best cash ISAs

When choosing a cash ISA, there are two main factors to look out for: how long you are comfortable locking your cash up for and the interest rate.

• Easy access ISA accounts allow you to withdraw funds without incurring a penalty.
• Fixed-rate cash ISAs offer a fixed rate of return – usually higher the longer you are prepared to lock your money away. Note: if you withdraw money before the end of the term, then you are likely to be penalised, usually with a reduction in the rate of interest.

Generally speaking, the longer you leave the money untouched, the more interest you can earn. Many ISAs are classed as ‘flexible’, meaning you can replace any funds you withdraw in the same tax year without affecting your annual ISA allowance – which is currently £20,000.

However, make sure you're making your money work hard for you, and earning inflation-beating savings rates on your cash.

James McCaffrey of TotallyMoney says: “If you’re sitting on savings, check the rate your provider is paying, and if it’s below 4%, then consider moving your money. It’s as simple as filling out a form, and you can transfer all or part of your savings, with cash ISA transfers taking no longer than 15 days."

We have an ISA guide to help you learn everything you need to know about how they work, how much you can pay in, what investments you can hold, and how to transfer one.

Troubled Metro Bank is attempting a comeback with two top savings accounts after it boosted the rates on both fixed and easy access deals.

The bank recently secured its future following a £925m rescue package to help it climb out of its £600m debt hole.

But what is Metro Banking offering to savers, who can get it, and how do the rates compare to the rest of the market? We have all the details.

What is Metro Bank offering for cash savings?

Metro Bank now has the new best buy for top easy access and one year fixed savings.

Metro Bank’s top easy access accounts

The Instant Access Savings account pays 5.22% AER - jumped up from 1.65% AER.  This is a limited edition rate so you will have to be quick to grab the top rate, as the bank states the product is subject to availability. 

To be eligible for the rate, you must deposit at least £500 in the saver within 28 days of opening your account. Balances between £1 and £499 will receive a lower rate of 1.65% AER (variable). 

The 5.22% AER rate is variable for 12 months, which means the rate you earn could change, but it will not drop below the standard variable rate of 1.65% AER. 

You have the freedom to withdraw your money when you like, but note there is a £5,000 daily limit when paying cash into your personal savings account. 

Interest is paid monthly, and you can open the account either online or in one of their 67 branches across England and Wales. 

Metro Bank’s top one year fixed account

The bank now offers 5.91% AER on one-year fixed accounts from 10 November. Before this, the rate was 5.21% AER on its one-year fixed saver.  

Metro Bank will automatically open a Funding Account in your name when you open a one-year fixed saver online, and the money you deposit will first go into this funding account. This will then get transferred to your fixed savings account once you have deposited a minimum of £500.

If you do not deposit any money into your funding account within 30 days of opening the saver, your funding and one-year fixed account won’t be activated. 

You will also need to hold either a Metro instant access account or a Metro current account, so your interest can be paid into there. 

You can choose to have interest paid monthly or annually to your saver, and you can also open this account online or in branch. 

Is my money safe with Metro Bank? 

While the bank has been in troubled waters, any money you deposit with Metro Bank is protected by the Financial Services Compensation Scheme (FSCS) for up to £85,000 should the bank go bust. 

Kalpana Fitzpatrick, senior digital editor of MoneyWeek, says: “While up to £85,000 of your cash is protected by the FSCS, you should avoid putting in more in any given bank. The FSCS protection is per banking group, per person - so it comes back to the good old saying, which is not to put all your eggs in one basket."

What other savings rates are available on the market? 

Since the Bank of England froze the base rate at 5.25% for the second consecutive month, MoneyWeek has seen the best savings rates fall over the past couple of weeks, with one-year fixed savings dropping below the 6% mark. 

Easy access accounts still remain around 5%. Here are the top rates on the market right now: 

• Ulster Bank, part of the Natwest Group is offering 5.2% AER. Open the account with £5,000.  
• Cynergy Bank is offering 5.15% AER. Open the account with just £1.  
• Beehive Money is offering 5.15% AER with its Limited Issue Easy Access account. Open with £1,000.  

If you’re prepared to fix your money, here’s what’s on the market for one year fixed savers. 

• JN Bank is offering 5.9% AER. Open the saver with £100.  
• Union Bank of India dropped its rate from 6.05% to 5.9%. Open the account with £1,000.  
• Al Rayan Bank is offering 5.85%. Open this Sharia-compliant bank with £5,000.

Paragon Bank has launched a best buy easy access savings account, paying 5.25% AER (variable). The rate makes the account the best buy for savings accounts.

While the rate doesn’t beat inflation, which currently sits at 6.7%, the new easy-access savings rate matches the Bank of England’s base rate, frozen at 5.25%, after months of interest rates going up. 

Paragon launched the first issue of this savings account in July and has since been hiking the rates - the last time it increased the rates was in September, when it pushed the rates from 4.75% AER to 5.05% AER- but this rate was pulled within three weeks due to popular demand. 

If you’re looking to take advantage of this rate, then it is worth noting there are some restrictions and we explain why you may need to act fast to bag it. 

How does the Paragon savings account work? 

Although the account is an easy access account, it is double access, meaning you can access your cash twice before you hit a penalty. 

Derek Sprawling, Paragon Bank savings director, said: “This product could suit those

savers who are happy to lock their money away, but may want to retain access to it in the event of a rainy day.”

If you make more than two withdrawals within a 12 month period, the rates drop to just 1.5%.

How much do I need to open a savings account with Paragon Bank? 

You can start saving in the account with £1,000 and save up to a maximum of £500,000 - but only up to £85,000 is protected by the Financial Services Compensation Scheme (FSCS). 

You must make your initial minimum deposit within 28 days of opening your account, otherwise your saver will be closed. Plus, if at any point your balance falls below £1,000, the account will be closed.

As the rate is variable, it could change. Paragon says that if the rate rises on your account, you will be notified as soon as possible, but this could be after the rate comes into effect. If the rate drops, you will be told 14 days before the change. 

How long is the Paragon bank rate available for? 

The bank has confirmed the new rate on its Double Access Saver will only be on sale for a limited time, so you will need to act fast to bag the new 5.25% top rate.

Best buy rates are usually axed once the account reaches capacity. 

For example, HSBC pulled its one-year fixed ISA which offered a top rate of 5.7% AER for a limited time. 

NS&I also withdrew its market-leading one-year fixed bond offering 6.2% AER after only five weeks of being on the market. This was the highest rate seen on bond products since 2008. 

High-street giant Santander dropped the rate on its market-leading 5.2% easy-access savings account one week earlier than expected, due to high demand. 

What are the alternatives to Paragon?

If you are looking for an easy access account without a limit on the number of withdrawals, then there are alternatives where the interest rate difference is minimal. 

Beehive Money Limited Issue Easy Access pays 5.2% with unlimited withdrawals, and its minimum £1,000 deposit, the same as Paragon.

To be eligible for this account, you must be a UK resident aged 18 years or over. You can open and manage the account online, and you can choose to have interest paid either monthly or annually. 

Other alternatives include:

If you’re looking for an account that offers freedom with withdrawals, you can opt for either the Beehive Money Saver or Ulster Bank. 

And if you don’t have a minimum balance of £5,000 to save in Ulster Bank, Beehive Money only requires £1,000.

Of course, if you’re willing to fix your money, you can earn a higher rate on your savings. Currently, the best one-year fixed savings accounts offer more than 6%.

Plus, if you have less than £20,000 to save over a year, it may be worth opening an ISA and giving your cash a tax wrapper- read more on which is better, a savings account or an ISA.  

Packaged bank accounts are current accounts that charge a monthly fee in exchange for certain perks. These could include insurance policies, car breakdown cover, cashback, higher savings rates, or monthly freebies.

Similar to a current account, you can receive or send money, make payments and pay your bills. The difference is that you’ll be charged a fee each month, depending on the type of account you choose, so it’s worth shopping around for the deal that best matches your needs.

The best packaged bank accounts

We’ve rounded up some of the top packaged bank accounts on the market right now.

We take a further look at the accounts below.

What to consider before opening a packaged bank account

Before opening a packaged bank account, make sure you consider all the elements to ensure the perks outweigh the costs.

• Take a close look at any insurance policies being offered. If travel insurance is included, make sure that you’re eligible, if your travel insurance covers any activities you intend on doing, and that the policy covers countries you plan on visiting.
• If you have any pre-existing medical conditions, make sure you tell the bank when you open your account. This could hamper your chances of being accepted for the account, but it’s a better outcome than not disclosing a condition, only for something to happen down the line and find out you are not covered. We look at how to get travel insurance for over 70s in a separate guide.
• Does it suit your needs?: If an account comes with additional perks, make sure if they’re useful to you. For instance, do you go abroad enough to make the most of travel insurance, or would you be better off paying for it separately? Don’t forget to check that the bank account is suitable for you. For instance, you might want to consider what its overdraft limit is and whether it offers branch access, if that’s important to you.

Are packaged bank accounts good value?

Working out if a packaged bank account offers value for money is straightforward: take the monthly charge and multiply it by 12 to get the annual cost. Then shop around to see what the benefits would cost you separately.

Make sure you repeat those processes each year rather than sticking with a packaged account for years that may no longer offer you good value.

If you’re a keen reader of our up-to-date guides on the best savings accounts, you may have noticed a number of Islamic finance banks tend to be in regular contention for the top spot. But did you know that these accounts are available to anyone, regardless of faith?

Here’s what you need to know about what is Islamic finance, how it works and why you may want to consider switching your savings account.

What is Islamic finance? 

Banks that operate under Islamic law have a handful of key principles that differentiate them from Western peers.

Such banks do not charge interest to customers to borrow money, nor do they pay any interest on savings or current accounts.

These banks also avoid benefiting from investing in businesses that are against Islamic values, such as armaments, gambling, pornography, drugs, tobacco, pork or alcohol, and tend to steer well clear of any high-risk investments.

Islamic law states that money has no intrinsic value, meaning banks and lenders seek to generate an “expected profit rate” as opposed to a rate of return. This means that when you open an account with an Islamic bank, your money is invested in a profit-share arrangement.

But it's important to note that any such expected profit rates are not concrete, and the bank could give you less back than you initially put in. This is unlike a standard fixed rate account, which guarantees to pay you a certain rate for a fixed period of time, regardless of how the bank may be performing. 

 Is my money safe in an Islamic bank?

In a nutshell, yes. It is extremely rare for a UK-operating Islamic bank to not meet its expected profit rate, but if the bank fears it will have to return you less than stated, it will contact you ahead of time.

Al Rayan Bank says on its website, “If, for some reason, the Bank were unable to meet the expected profit rate it had quoted on its fixed term deposit products, the customer would be notified and given the option of ending the agreement, with their original deposit and profit earned to date intact, or they could accept a lower “expected profit rate” moving forward.”

As such, you should have a good sense of confidence when it comes to achieving the profit rates set out by Islamic banks, while fail safes such as reserve funds are in place to cover periods where the bank may be running at a loss.

And there’s good reason why Islamic banks want to keep savers as satisfied as possible - they are dependent on savers’ cash. Owing to the constraints of Sharia law, Islamic banks cannot borrow money from other lenders through the interbank system, meaning a steady flow of cash from everyday savers. Happy savers make for a happy bank.

From a saver’s perspective, Islamic banks work in practically the same way as any other lender, and the Financial Services Compensation Scheme (FSCS) sees it that way too. It protects any deposit up to £85,000 should anything happen to your bank, so you can be assured that your money is as protected in a Sharia-compliant account as it is in any other high street bank.

 Islamic Banks in the UK 

If you’re planning to open a savings account, there are a lot of Islamic finance services where you can put your money. For example, Gatehouse Bank is offering a market-leading 7% rate on its regular savings account where you can start saving from just £1 and go up to £300 per month. 

We’ve rounded up some of the most popular banks:

• Ahli United Bank
• Al Rayan Bank
• Habib Bank AG Zurich
• Gatehouse Bank
• Bank of London and the Middle East
• Qardus
• Qatar Islamic Bank 

A new top dog has emerged in the easy access savings space.

As savers look to stem the impact of inflation on cash holdings, Coventry Building Society has launched a new easy access account offering a market-beating rate of 4.50%.

The average easy-access rate is 2.58%, according to Moneyfacts.

The new offering from the lender tops our list of best easy access savings accounts. It’s even better than some of the one-year fixes on offer from high street lenders. 

Easy access savings

Coventry Building Society’s Four Access Saver is available to both new and existing savers and can be opened online with only £1. You can deposit up to £250,000 but it is worth remembering that only £85,000 is protected under the Financial Services Compensation Scheme (FSCS) - perhaps take a look at National Savings and Investments (NS&I)’s Premium Bonds if you’ve got more to invest and are concerned about the safety of your money. 

But the account isn’t as easy to access as some other accounts. As the name suggests, you can only access the account four times within 12 months. Withdrawals beyond this limit are subject to a charge equal to 50 days' interest. 

Daniel McDonald, senior savings product manager at Coventry Building Society, said: “We're expecting our new Four Access Saver account to be popular with savers looking to take advantage of a market-leading rate while still having access to their money if they need to.”

“The account is ideal for those looking for a place to save their rainy-day fund or are saving up for something specific, but don't want to lock their money away and are able to withdraw their savings up to four times a year without charge.”

Can you beat inflation?

Savers have been up against it in trying to beat inflation. Despite rising rates and the new offering from Coventry Building Society, no provider currently offers an easy access account that beats inflation. 

But you can now earn 6.1% on one-year fixed savings accounts – the best rate seen in 14 years, while a two-year fixed savings account can net you 6.15%.

But could you be putting your cash to better use? Amid high inflation, investing your money could help you generate real returns. According to the Barclays Equity Gilt Study, UK shares have beaten cash in 90% of five-year periods since 1899.

So, if you’re happy to take some risk with your money you can invest it. But if you’re wanting to have some more control over your money while somewhat hedging against inflation, then a leading easy access account could fit the bill.

The government-backed National Savings & Investments (NS&I) has bumped up the interest rates on its cash ISA following last week’s base rate increase to 4.5%.

NS&I Direct ISA customers can now earn 2.4% on its cash ISA account - up from 2.15%.

While the increase will be welcomed by customers, NS&I’s ISA rate is still lagging behind its rivals - see our article on the best cash ISA rates to see what other providers are giving.

NS&I says the change brings its Direct ISA in line with other easy-access ISAs available on the market, thought it's not necessarily the best.

“The change made to NS&I’s Direct ISA will ensure that the product is priced appropriately when compared to the rest of the ISA market. It will also help ensure that NS&I continues to balance the interests of savers, taxpayers and the broader financial services sector,” the savings outfit notes.

The NS&I ISA rate was last upped in February alongside a number of other NS&I products, including Income Bonds and the prize rate on its popular Premium Bonds.

Is the easy access NS&I direct ISA a good deal?

If you like the security that come with NS&I - which is that it guarantees to protect any money saved in its products as it is backed by the Treasury - then NS&I is certainly a good choice.

But, if you are simply looking to get the best return in your cash ISA, then you can do better than NS&I, depending on your requirements.

For example, you can currently earn 3.5% with Cynergy Bank’s easy access ISA, which like NS&I, can also be opened with just £1.

And Shawbrook Bank’s easy access lets you earn 3.45% - but you will need £1,000 minimum to open the account. You can find all the latest ISA rates in our article on the best cash ISAs.

And although other banks offer protection from the Financial Services Compensation Scheme for up to £85,000 of your savings, they do not come with the unlimited guarantees that NS&I does.

Sarah Coles, head of personal finance at Hargreaves Lansdown says the product is “trailing well behind the market,” although it is “well ahead of the high street giants”.

However, the headline rate of 2.4% is “nothing to get excited about,” she notes.

“It’s not only lagging the most competitive deals by a significant margin, it’s also well behind the 2.85% on offer on its other easy access products.”

Coles says the upped rates on the ISA may appeal to those with “significant savings” beyond the £85,000 guaranteed by the FSCS.

“However, for those holding less than £85,000 with any one savings institution, there’s the FSCS to protect them, so the gap between this rate and the rest of the market may be big enough to make them think twice,” she says.

Why do savers like NS&I?

NS&I is not renowned for its sky-high rates, rather it attracts customers with its promise to guarantee your money. Not only that, but its millionaire-making Premium Bonds are hugely popular, with savers drawn to the security offered in parallel to the chance to win a life-changing amount of money.

In February, £2bn was deposited with the government-owned savings bank after the collapse of Silicon Valley Bank rattled the nerves of investors across the globe.

Every month Premium Bond holders are entered into a draw where they can win prizes ranging from £25 to £1m. This month, two savers were made millionaires by the Premium Bond draw.

One lucky bond holder has won a grand total of 288 prizes, including the lucrative million-pound top prize. On top of the £1m reward, they have also won one £10,000 prize, one £1,000 prize, eight £100 prizes, 45 £50 prizes and 232 prizes worth £25.

Recently, NS&I has been upping rates across the board while introducing new products. In February it increased the Premium Bonds prize fund rate from 3.15% to 3.30% and brought its Guaranteed Growth Bonds (4%) and Guaranteed Income Bonds (3.9%) back on sale with higher rates.

The same month, NS&I launched a fourth Issue of its Green Savings Bonds account at a fixed rate of 4.20% gross/AER over a three-year term.

All the financial institutions we feature are protected by the Financial Services Compensation Scheme (FSCS), meaning up to £120,000 of your savings are protected should a bank go bust.

Fixed savings accounts, or fixed-rate bonds, are different from easy-access savings accounts as they let you earn high interest by locking your cash away for a fixed period.

These accounts can be ideal for anyone hoping to earn interest on their savings at a rate that’s guaranteed for a fixed period of time.

However, with the Bank of England holding interest rates at 3.75% in its June meeting, fewer fixed-term bonds can now beat inflation.

If you lock in your savings for a year, you can earn up to 4.9% interest. We list the best accounts on the market below.

We round up the best savings rates in a separate guide.

• The best one-year fixed rate is 4.9% AER with Marcus by Goldman Sachs.

One-year fixed savings accounts

AlRayan Bank Meteor Savings 1 Year Fixed Term Deposit – 4.8% AER

You can open this fixed saver through Meteor Savings, a savings provider. The savings account comes with a 0.15% boost, making your effective rate 4.8% AER and the top-paying deal on the market currently. You can save between £1,000 and £1 million. However, only £120,000 will be eligible for FSCS protection. Interest is paid at maturity.

OakNorth Bank Fixed Term Savings Account – 4.76% AER

OakNorth Bank is offering a 4.76% rate on its 12-month fixed saver. You can deposit just £1 and save up to £500,000. However, keep in mind that the FSCS will only protect £120,000 of your deposit money. The account needs to be funded with payments within the first 14 days. You can open the account online or on the OakNorth mobile app. Interest will be paid at maturity.

Family Building Society 1 Year Fixed Rate Bond – 4.76% AER

New and existing customers can save between £10,000 and £250,000 in this fixed bond. However, only £120,000 of your money is eligible for FSCS protection. Additional deposits are allowed for 15 calendar days after you open the account. The account can be opened online, and you can also manage it by phone, post or at a branch. Interest is paid annually on 30 June and on maturity.

Union Bank of India (UK) Ltd Fixed Rate Deposit – 4.76% AER

This one year fixed saver by Union Bank of India (UK) is offering 4.76%. To open this account, you can start saving with £1,000 and deposit a maximum of £1 million. Interest is paid annually when your account matures. You can open the saver in branch or by post.

MBNA Fixed Saver 1 Year – 4.75% AER

You will need to pay a minimum deposit of £1,000 to open this account, and the most you can save is £750,000. However, it's worth keeping in mind that only up to £120,000 will be protected by the FSCS. You have to fund the account within the first 14 days. Interest is paid on maturity. The account can be opened online and managed by telephone.

GB Bank 1 Year Fixed Rate Bond – 4.73% AER

Earn 4.73% with this saver and open this account with a minimum £1,000 deposit. You can save up to £100,000. The account can be opened online, and you have up to 21 calendar days to deposit your funds. Interest is paid at maturity.

Close Brothers Savings Fixed Rate Bond – 4.7% AER

With Close Brothers Savings, you can save between £10,000 and £2 million per account, but note that only £120,000 of the sum will be protected under the FSCS. The account can be opened online, but you can also manage it via post or over the phone. Interest is paid at maturity.

Penrith BS 1 Year Fixed Rate E-Bond – 4.7% AER

This account from Penrith BS can be opened by saving anywhere between £5,000 and £120,000. You will have 14 days to fund the account. Interest is paid at maturity, and the account can be opened online.

Recognise Bank 1 Year Fixed Rate Account – 4.7% AER

This Recognise Bank fixed saver pays 4.7% interest on its fixed saver. You can deposit between £1,000 and £120,000, and the account can be opened online. Interest is paid at maturity.

UBL UK 1 Year Fixed Term Deposit – 4.68% AER

This one-year fixed savings account pays 4.68% interest, and you have to stash between £2,000 and £1 million to qualify for the rate. You have ten calendar days to fund your account in order to secure the rate. The account can be opened and managed online, via post or in a branch. Interest can be paid monthly or annually.

Ziraat Bank Raisin UK 1 Year Fixed Term Deposit – 4.67% AER

Earn 4.67% with this one-year fixed from Ziraat Bank – but you need to sign up via Raisin to get this rate. You can save between £1,000 and £120,000. Interest is paid at maturity. The account can be opened online.

Is a fixed savings account right for me?

If you’re happy to lock your money away for longer, you have the option of two or five-year fixed-rate accounts which might offer a better interest rate.

“However, if you’re looking to save for five years or more, investing gives you a better growth potential as you benefit from compounding and you have a stronger chance of making your money grow and beating inflation. But investing is not risk-free and it can take time for your money to grow,” says Kalpana Fitzpatrick, MoneyWeek’s senior digital editor and author of Invest Now.

Once a fixed period ends, you will have to open another account – either with the same bank or elsewhere. It is also worth noting that if you fix an account and interest rates go up, you will be stuck with the rate you have until the fixed period ends.

Over the past six months the Bank of England has hiked interest rates, but high street banks have not passed all of the increase on to savings accounts.

You can get about 4.5% for a one- or two-year fix (there isn’t much of a premium for a three- or five-year one right now), mostly from smaller banks and building societies such as Hampshire Trust Bank and Tandem.

The biggest high-street names offer a maximum of about 4%, such as Tesco Bank, TSB, Halifax and National Savings & Investment.

All UK-regulated banks and building societies have Financial Services Compensation Scheme (FSCS) protection for savings accounts, but this only covers amounts up to £85,000 per person per institution (not per account).

So if you have a large lump sum to save, you will need to chose providers more carefully.

Structured deposits

However, traditional deposits aren’t the only home for your cash – experienced investors could also look at structured deposits.

These are increasingly sold by firms who usually focus on riskier structured products, but are very different to their traditional offering.

In essence, they are deposits with major global banks – such as Société Générale, Barclays, Goldman Sachs or Royal Bank of Canada (RBC) – structured to provide a variety of returns.

The underlying deposits are still FSCS protected, but you can have variants that offer non-conditional, fixed interest, others that pay conditional interest that is linked to the level of a stock market index, or a combination of both.

Fixed-rate products may pay over 4% for three to five years, while the conditional deposits have the potential to target 6%-8% or more. There’s the opportunity to invest via an individual savings account (Isa), making returns tax-free.

Rising demand

Over the past six months, there’s been increasing demand for structured deposits, says Richard Harry, an independent financial adviser (IFA) who tracks the structured deposits market and sells direct (see bestpricefs.co.uk).

The most common products look like a fixed-income bond, but have a small “equity kicker” such as an extra 0.5% at maturity if, say, the FTSE 100 is higher, says Ian Lowes, another IFA who runs a review of the sector (see structuredproductreview.com).

One of the most successful products for both of them has been the IDAD Barclays Inflation-Linked Deposit Plan April 2023.

This provides a gross interest payment at maturity equal to the rise in the retail price index between January 2023 and January 2027, plus a potential additional 2% interest if the FTSE 100 closes at or above its initial level.

“To keep up with ‘real returns’ this is the only deposit in the UK structured deposit market that is shaped in this way,” says Harry.

This month, Tempo Structured Products, one of the major structured product providers, has entered the structured deposit market with a range of six structured products in conjunction with Société Générale and RBC.

These have varying degrees of stockmarket linkage – for example, one five-year deposit with RBC pays a core 2% interest rate plus the potential for bonus interest of 3.75% each year if the market doesn’t fall.

Tempo is championing the use of plain English and ensuring that its product literature is independently “crystal marked” as jargon free by the Plain English Campaign.

It uses the language of cash and savings products rather than more complex investment instruments – for example, by including details of annual effective rates (AER) for all its products, not just simple interest rates that are more commonly used for structured deposits.

This could make them easier to understand and accessible for people who are more familiar with savings than investments.

Attractive if rates come down

There must be a decent chance that central banks “pivot” at some point and rates will come down. If you think that scenario is likely, fixing an FSCS-backed structured deposit return via an Isa wrapper might make sense for some – though not all – savers and investors.

Even though the interest paid by structured deposits can be linked to stockmarkets, they offer full return of capital at maturity without any stockmarket risk – unlike traditional structured products.

That said, it is important to understand the terms of each product before investing. Note that there may not be a guaranteed right to cash in early if you need the money – and that doing so may mean that you get back less than you paid in. They are definitely not suitable for anybody who may require immediate access.

The collapse of Silicon Valley Bank and Credit Suisse in the US has undoubtedly sent shockwaves across the globe, but for both savers and investors, it has left many nerves rattling, with questions being asked over whether money is safe with a bank. With more savers switching to the safety of NS&I, we look at whether now is a good time to switch to government-backed National Savings & Investments (NS&I).

NS&I has attracted £2bn in February alone, according to Bank of England data.

In December 2022, £700m was deposited, while a month prior, £300m was withdrawn from accounts.

While UK savers and investors benefit from a layer of protection from the Financial Services Compensation Scheme (FSCS) - which covers you for up to £85,000 should a bank or building society go bust - with NS&I, your cash is guaranteed by the Treasury to be safe no matter how much you hold.

And with an increase in interest rates across NS&I savings accounts, savers are increasingly looking to stash their cash there for higher returns and added security.

It is highly expected that NS&I may increase rates further to help boost funding - this is looking more likely as the Bank of England put up its Base rate this month to 4.25%.

If NS&I rates do go up, it is likely that more will turn to it as market volatility in the banking continues, which has already seen some investors readjust their portfolios according to investment platform Interactive investor.

Should you save with NS&I?

If you have more than £85,000 saved in cash, which you may have if you are saving for a house deposit maybe, then it makes good sense to put it into a NS&I account as you get a higher level of protection.

If you are worried about your bank not being safe, then it is worth noting that banks are covered for up to £85,000 of your cash via the FSCS. You can see if your bank is covered at FSCS.

What rates does NS&I offer?

NS&I has been upping rates for its products, including the premium bond prize fund rate from 3.15% to 3.3%, meaning there will be an extra £15m in prizes up for grabs each month.

We have the details of the March premium bond winners in our article - March premium bond winners revealed.

It marks the fifth rate increase for premium bonds in the last year alone.

In February, NS&I bumped up the interest rate on its green savings bond - up from 3% to 4.2%. It is available on a three-year fixed term.

This year also saw the relaunch of NS&I’s one-year fixed bonds, offering rates up to 4%, pitching the bonds as a competitor to some of the best one-year fixed savings accounts.

Meanwhile, its direct saver account offers a 2.85% variable rate, while its direct Isa offers 2.15%.

The junior Isa currently offers 3.4%.

Bank, building society or NS&I?

It’s not only NS&I that’s been attracting positive inflows. Banks, building societies and NS&I reported a combined net flow of £3.6bn into customer accounts – £300m more than in January.

And while NS&I may look look attractive, you may find better interest rates elsewhere - conventional banks may be incentivised to continue putting up rates to persuade savers to keep their cash in place.

Samuel Tombs, Pantheon Macroeconomics chief UK economist, said: “Households will be further disincentivised from spending their savings if, as we expect, banks raise deposit rates in order to ensure that depositors who have funds over the £85,000 guaranteed by the Financial Services Compensation Scheme do not withdraw their money.”

But savers are “continuing to vote with their feet” and shift their money to better-paying accounts, says Laura Suter, head of personal finance at AJ Bell.

“Fixed-rate accounts continued to be popular, as people lock in higher rates, with £6.8bn of money deposited in these accounts. February was the fifth consecutive month where people moved their money out of easy-access accounts and into fixed-rate ones.

“As many signal that we’re nearing peak interest rates it’s a good time for savers to snap up higher rates now, before the market plateaus when the Bank of England ends its rate-hiking cycle,” she said.

The Financial Services Compensation Scheme (FSCS) protects savers and investors if a financial institution fails. Set up by the government, the institution is independent and free to use and is designed as a safety net to protect users of banks, building societies and investment accounts.

the FSCS will pay a certain level of compensation per person per financial institution to cover any losses if a bank, building society, pension provider or investment broker goes bust. If you have substantial savings or investments, you may want to set up accounts with multiple financial institutions. If you do plan on splitting your savings, be aware that many banks, building societies and pension providers are part of a suite of financial brands owned by a larger organization, so check you are genuinely saving with two separate institutions.

For more details, including how to check your financial product's eligibility and how to make a claim, go to the FSCS website.

If you're looking for the best savings rates, you can earn up to 5% with the top easy-access account, 4.9% with a one-year fixed bond, 8% with a top regular saver or 4.7% with a cash ISA.

While savings rates are lower than they were a few years ago, you can still find inflation-beating deals on the market and make your money work hard for you.

You shouldn’t judge a savings account solely by its top rate, but rather check whether it fulfils your needs – both short-term and in the long run. This includes looking at whether there are any restrictions on withdrawals or bonus rates, which could mean the rate quickly drops when the boost comes to an end.

The Bank of England held interest rates in June, so if you want a competitive rate on your cash, you may need to act quickly.

Below, we look at the top rates for notice savings, easy-access savings, fixed bonds, regular savings and cash ISAs.

Note:
All the banks we mention in this article are protected by the Financial Services Compensation Scheme, meaning up to £120,000 of your savings are protected should a bank or other financial services company go out of business.

Best notice savings rates

The best easy-access savings rates

Best regular savings accounts

The best one-year fixed rates

The best two-year fixed rates

The best three-year fixed rates

The best easy access cash ISAs

The best one-year fixed rate cash ISAs

The best two-year fixed rate cash ISAs

The best three-year fixed rate cash ISAs

Types of savings accounts

There are several different types of savings accounts to choose from.

• Easy access savings accounts: These allow you to take your money out as and when you please. However, some come with restrictions on withdrawals, which can mean you can’t immediately access all of your money in the account in an emergency. For instance, you may only make same-day withdrawals if done before a particular timeframe, or you may only be permitted a limited number of withdrawals before the rate on your account drops.
• Fixed-rate savings accounts: These come with restrictions, so you can’t access your cash until the account reaches maturity; otherwise, you may face a hefty penalty. You usually earn more interest if you are willing to lock your cash away for a fixed period, but keep in mind that this also takes away flexibility should you need the cash suddenly. Here's how much you should have in emergency savings.
• Regular savings accounts: Regular savers reward customers who are ready to commit to a consistent savings habit. These are usually the top-paying savings rates in the market, but can also come with withdrawal restrictions and are usually fixed for a certain time. We look at whether easy access or regular savings accounts give you the best return in a separate piece.
• Individual savings accounts (ISAs): These are a type of ‘tax wrapper’ into which you can put cash or investments. Currently, you have a £20,000 limit on how much you can set aside into an ISA. We look at how many ISAs you can have in a separate guide.

If you aren’t saving in this type of account, you could be forced to pay tax on interest. We look at ways to shelter your money from the savings tax trap.

If you’re looking to switch your current account, take a look at our guide to the best bank switching offers, where you can earn as much as £250.

What is the maximum amount protected by the Financial Services Compensation Scheme (FSCS) in the UK?

The Financial Services Compensation Scheme (FSCS) protects up to £120,000 of your savings and investments if a financial institution goes bust.

Previously, the limit was £85,000 for sole accounts and £170,000 for joint accounts, but it was raised to £120,000 and £240,000 respectively in December 2025.

All accounts listed above are eligible for FSCS protection. You can check if your account is protected online on the FSCS website.

What is the current Bank of England base rate?

The current Bank of England base rate is 3.75%. Interest rates were held at that rate in June. The next decision from the Bank of England will be announced on 30 July 2026.

The central bank’s Monetary Policy Committee meets eight times a year to set rates.

This article is updated regularly to bring you the latest on the best savings rates. Sign up for our newsletter to stay up-to-date on all the latest deals for cash savings.

Challenger banks, also known as digital or app-based banks, have been disrupting the banking industry for some years now. But for users, they provide tools and services that standard high street banks are yet to develop.

They've also become popular with savers, often offering better rates than traditional high street banks. Whether you're looking for the best savings account or a new current account, more of us are shifting to digital banking as the challenger banks continue to grow in popularity.

Unlike traditional banks, digital banks do not have physical branches and you’ll have to deal with the bank exclusively via your mobile phone – even for things like paying in a cheque, should you ever get one again. 

Here are the best digital banks and what they have on offer.

The best app-based bank accounts

Monzo

Monzo, launched in 2015, is one of the best app-only banks for budgeting and tends to do well in customer ratings.

It offers real-time notifications via your mobile every time you spend. And if you want to know where most of your money is going, you can easily see summaries of your spending which is categorised.

The app also allows you to set budgets, which is useful amid the cost of living crisis where prices are creeping up. Its salmon coloured card is popular with those in their twenties, but as more people become conscious of how they spend, the digital bank is likely to attract more attention with its useful budgeting tools.

The bank also has its own instant access savings account, offering a rate of 4%. The interest is paid monthly into the savings pot you create. You can withdraw money at any time, but it will take one working day for it to hit your account. You don't need a minimum deposit and can hold up to £100,000. 

• Monzo doesn’t charge any overseas spending fees, but ATM withdrawals are only free up to £200 every 30 days. A 3% charge applies after that.
• It offers joint, business and personal accounts.
• The Monzo Premium account, a packaged account that includes features such as mobile insurance, and travel insurance, costs £15 a month and pays 1.5% AER.
• The account comes with an optional £2,000 overdraft and loans up to £25,000.
• Monzo is protected by the Financial Services Compensation Scheme (FSCS), meaning that you can get up to £85,000 worth of protection on your money should the bank go out of business.
• Cash can be paid into the account via any of the 28,000 PayPoint terminals in the UK, located in local shops.

Chase

US-based Chase has become popular in the UK with its cashback on purchases deal and competitive savings rates.

• The bank's introductory 12 month 1% cashback offer has been extended, and customers can now earn 1% cashback for another 12 months as long as they deposit £500 into their account once the initial 12 months expire.
• From April the bank is introducing interest on its current account. From April, new and existing customers will get 1% interest on their current account balances with no fees or minimum deposits.
• The Chase saver, which is linked to the current account, pays 4.1% AER. Customers can open multiple savings accounts and save up to £500,000.
• You can also earn 5% AER variable interest on “round ups” – customers can round up each card transaction to the nearest pound and put it into a separate savings pot that pays 5% interest.
• There are no charges for overseas spending.
• Chase is FSCS protected.
• There is no facility for paying in cash.

Starling

Starling Bank won the “Best British bank” for four consecutive years until 2021 and offer similar tools as Monzo to help you budget, save for your goals and keep track of your spending. Starling also recently entered the savings market, offering you 5.25%  on a one year fixed. 

• You can have a business, personal, joint, dollar and euro accounts.
• It offers a debit card for children (Kite) for children aged 6 - 16, linked to the parent’s account, but this will cost you £2 a month.
• Free cash withdrawals abroad and no fees for overseas spending; transactions are converted at the Mastercard exchange rate.
• AER of 0.05% on personal current account balances up to £85,000.
• Allows you to spend money abroad with no fees.
• It is FSCS protected.
• Cash can be deposited at any Post Office branch and if you happen to get a cheque, you can use the app to scan it in.

Atom Bank

Atom Bank offers savings accounts and mortgages rather than a current account.

• Atom Bank does not operate a current account and can’t be used for daily spending.
• Atom Bank’s fixed saver account (one year) has a rate of 5.9%.
• Only open to UK residents.
• Atom Bank has a maximum savings limit of £200,000.
• There is no minimum deposit required for the instant saver but the fixed saver requires a minimum deposit of £50.
• Protected by the FSCS

Pros and cons of using app-only accounts

Pros

Many app-only banks have gained recognition for having excellent customer service as the absence of physical branches means digital banks often focus heavily on online customer service. Most app-based bank accounts offer fee-free transactions abroad

Accounts can be opened in minutes and come with useful budgeting tools and simple savings options. Most accounts will break down your spending by type so you can see where your money goes each month, which is handy if you are trying to set up a budget and stick to it. Alerts whenever you use your card also help you keep on top of spending.

Several app-based banks also offer round-up savings services: every time you spend on your card, the amount is rounded up to the nearest pound and the difference is put in a savings account.

Other benefits include the ability to set your own contactless spending limit., If you are uncomfortable with the standard £100 limit, you can change it in an instant. And if you lose your card, you can block it in the app.

Cons

App-based banks usually have fewer account types on offer compared to larger high street banks or more established banks. You generally get the choice of a current account and a basic savings account.

While Monzo and Starling do use the current account switching service, they may not offer any cash incentive to tempt new customers.

As there are no physical branches, customers can’t get face-to-face support should they want to; rather, you will need to be comfortable with online and, possibly, telephone support. However, with major bank closing branches, digital banking is increasingly becoming the norm.

All the banks featured here are protected by the Financial Services Compensation Scheme (FSCS), meaning up to £120,000 of your savings are protected should a bank or financial firm go bust.

Easy-access savings accounts are a popular option for savers who want flexibility without sacrificing returns.

These accounts typically offer some of the top savings rates on the market while allowing penalty-free withdrawals, making them well-suited for emergency funds and short-term savings goals.

Currently, the leading easy-access rate is 5% AER from LemFi and Revolut. If you want to lock in rates before they drop any further, you can opt for a one-year fixed savings account instead.

Those hoping to maximise their tax-free savings allowance may also want to consider the best cash ISAs.

Below, we round up the best easy-access savings accounts on the market.

Best easy-access savings accounts

Revolut Instant Access Savings – 5% AER

If you open a Revolut Instant Access Savings account before 4 August, you can benefit from a boosted rate of 5% (variable) on your cash. You have to be a new customer, and the rate applies to savings of up to £25,000.

After 4 December 2026, the rate will revert to 2.9% for customers on a Standard (Free) or Plus Plan (£3,99/m), 3.25% on a Premium Plan (£7.99/m), 3.4% on a Metal Plan (£14.99/m) and 4% on an Ultra Plan (£55/m).

The maximum amount you can save is £5 million. ClearBank powers Revolut’s savings account, so customers are still eligible for FSCS protection for up to £120,000 of their savings via ClearBank Limited. Interest is paid daily. The account can be opened through the Revolut app.

Tembo Money HomeSaver – 4.55% AER

Tembo Money is a savings provider and not a bank; therefore, it doesn’t have its own savings accounts. The FSCS will still protect your money up to £120,000. You can earn 4.55% (variable) on your savings, which includes a 1.55% fixed bonus for 12 months.

You can also get a conditional 1% fixed HomeSaver bonus – payable if you complete a mortgage through Tembo Money Limited within three years from opening this account.

You can’t make over three withdrawals in one calendar year, and the account can be opened with just £10, up to 25,000. Interest is paid annually, and the account can be opened online via the Tembo app.

Chase Saver With Boosted Rate – 4.5% AER

You can earn a 4.5% boosted rate within your first 31 days of opening a Chase saver. It includes an extra 2.25% AER boost for 12 months on top of the standard variable rate. There is no minimum deposit requirement, and you can go up to £3 million. This offer is only available to new customers. Interest is paid monthly, and the account can be opened online.

Cahoot Simple Saver – 4.17% AER

Open this easy access saver with just £1 and save a maximum deposit of £2 million. But note, you can only earn the variable rate on balances up to £500,000, and only £120,000 of the sum is eligible for protection under the FSCS scheme. You can open this account online. Interest is paid at maturity.

Coventry BS 3 Access Saver 1 Year – 4.3% AER

The 4.3% rate from Coventry Building Society applies to all balances between £1 and £1 million, with only £120,000 eligible for FSCS protection. You can withdraw money from the account three times before incurring a 50-day interest penalty. You can open this account online, in a branch, via post or over the phone.

Ulster Bank Limited Edition Saver Account – 4.3% AER

This Ulster Bank limited edition saver pays 4.3% interest, which includes a fixed 12-month bonus of 2.75%. The top rate is paid when you save between £5,000 and £3 million – though only up to £120,000 of your savings will be eligible for protection under the FSCS. Interest is calculated daily and paid on the first business day of each month and at maturity. The account can be opened online.

United Trust Bank UTB Limited Access Saver Account – 4.3% AER

UTB is paying a variable rate of 4.3% if you save anywhere between £5,000 and £150,000. Only £120,000 of your balance is eligible for FSCS protection, and you will have 14 days after you submit your application to fund your account. If you make over two withdrawals, your rate will drop to 2.75%. Interest is calculated daily and paid annually on 31 October and at maturity. The account can be opened online.

Mansfield BS Triple Access Bonus Saver – 4.25% AER

This account from Mansfield BS pays 4.25% if you save between £1 and £400,000, of which only £120,000 is eligible for FSCS protection. The interest rate includes a 1% bonus that is fixed for the first 12 months, after which it reverts to 3.25%. You can access your funds thrice each calendar year, and open the account in person or via post. Interest is payable annually.

Sidekick Multi Shield – 4.23% AER

This saver can be opened online with a minimum balance of £10,000. The interest rate is 4.23% (variable) and includes a 1% bonus for six months on your first £120,000. It's worth noting that Sidekick partners with UK-regulated banks to provide its savings products. The rate is also a blended rate, which means that your first £120,000 is deposited at a higher rate partner bank, the second £120,000 at the next highest rate bank, and so forth. Since the above deal lets you allocate your funds across multiple banks, it is eligible for FSCS protection of up to £360,000. It is operated by Bondsmith.

Cynergy Bank Easy Access Account – 4.23% AER

You can grow your savings with 4.23% interest, which includes a 2% fixed bonus for the first 12 months. This saver can be opened with just £1, and you can save up to £ 1 million. Note that only £120,000 of your money will be protected by the FSCS. You can open this account online, and interest is paid annually.

Charter Savings Bank Easy Access – 4.21% AER

Open this account with £1 and save up to £1 million, but keep in mind that only £120,000 of your deposit will be protected by the FSCS. Interest is paid annually on maturity and you can open the saver online.

How do easy-access savings accounts work?

Easy-access savings accounts let you flexibly save your cash, by making as many withdrawals as you like without incurring a penalty.

You will earn a variable interest rate, which means that the provider can increase or decrease the rate on your savings account as they choose, which is usually the case when the Bank of England cuts the base rate.

If a market-leading account that you opened a few months ago is not offering a good rate anymore, it's worth shopping around regularly to ensure your savings are working as hard as possible.

When can I withdraw money with easy-access savings accounts?

Traditionally, easy-access accounts should give you unlimited and flexible access to your savings.

However, there is now a trend for savings accounts to restrict the number of withdrawals – while still calling the account "easy-access". If you breach the limits, the penalty is normally a loss of interest, or falling onto a lower interest rate.

It means you'll need to look carefully at any restrictions on withdrawals (which could limit the frequency or the amount you take out) before opening an easy-access account.

Funeral plans have been around for decades now and have become increasingly popular as people try to minimise the huge cost of a funeral.

But a badly managed route to increased regulation is causing chaos. Death is an expensive business. The average cost of dying – that’s your funeral, wake and any professional fees incurred in the process – is £8,864, according to SunLife. That puts it in the top five biggest expenses you’ll ever face after weddings, cars and houses.

Understandably, many people have tried to take care of the cost of their funeral long before they die by purchasing a funeral plan.

These allow you to pay in advance so you have the peace of mind of knowing your funeral is taken care of, and you may have avoided any future price increases. You can also choose to pay in instalments to spread the cost. More than 1.6 million plans had been sold by the end of 2020, according to the Funeral Planning Authority.

When planning doesn’t pay

The problem is many people have bought their plans from dubious companies. The funeral plan market has been unregulated. That meant plenty of cowboys using high-pressure sales techniques to sell plans, then taking huge sums in sales commission and leaving little to pay for the funerals. The Financial Conduct Authority (FCA) has belatedly stepped in to regulate the market. When its new rules comes in at the end of July, people who own funeral plans will get a lot more protection. You will be able to complain to the Financial Ombudsman Service if you are unhappy with your funeral plan provider. Crucially, your money will be protected by the Financial Services Compensation Scheme if your provider goes bust.

Not in safe hands

The major shortcoming is what happens until July. In order to keep trading, funeral plan providers need to become authorised by the FCA. But many providers do not meet the FCA’s requirements and aren’t even bothering to apply for authorisation. If a company doesn’t become authorised it has to stop selling funeral plans and transfer existing plans to an authorised business or “wind down in an orderly way,” according to the FCA.

One of the firms that couldn’t get authorisation is Safe Hands, one of the country’s biggest sellers of funeral plans. The firm has now gone into administration, and it is unclear if its customers will get back the thousands of pounds they have paid for funeral plans. It isn’t expected to be the last provider to collapse before getting FCA authorisation.

No money left

When a funeral plan is sold, the money is meant to be put into a trust fund with the sole purpose of paying for customer’s funerals when the time comes. But without adequate oversight, many firms – including Safe Hands – haven’t been putting all the money they receive into the trust. Some of the proceeds have gone on paying sales commissions and other company costs. This means there isn’t enough in the trust to meet projected funeral costs.

In the case of Safe Hands, reports now suggest there isn’t even enough in the trust to refund customers what they’ve paid. The only hope for its customers is that a big player such as Dignity or Co-Op will step in and take over their plans.

Set up your own savings

If you are considering buying a funeral plan despite this, the obvious advice is to wait until after the FCA starts regulating the market. You will then be able to buy a plan with the certainty that your money is protected. But not buying a plan at all may make more sense. You can budget for your funeral in the same way as a plan by making regular payments into a savings account set aside solely for the purpose of covering the necessary expenses.

Most banks and building societies will release funds to pay for a funeral without needing a grant of probate. Just make sure your relatives know that you have saved for your funeral and where to find the money.

Anyone who has ever organised a funeral can tell you it usually costs more than you would expect. The average funeral costs £9,263 according to SunLife, a life insurer, but the total outlay varies depending on your choices. Coffins don’t usually come cheap, while fancy flowers and a burial plot can all rapidly increase the price.

To avoid spiralling costs and save relatives the hassle of deciding the details, more and more of us are opting for a pre-paid funeral plan. You design and buy your funeral in advance, locking in today’s prices. But many people may not be getting the funeral they think they have paid for.

“This is a strange scenario: the purchaser is not around when the plan comes into effect, to assess whether it meets promised standards and complain if it doesn’t,” says Faith Glasgow in The Financial Times. People often don’t discuss their funeral plans with family so, after their death, their relatives don’t know what was agreed.

“We are currently dealing with a prepaid funeral where there is a lot of misunderstanding over what was included. The customers are under the impression the whole funeral was paid for, but we had agreed with the plan provider that the plan would cover only part of the costs,” one funeral director told the Financial Times. That family is facing an additional bill of £700.

One problem is commission, with will writers and funeral directors being offered hefty payments by third-party funeral plan firms if they can sign people up. Commissions can sometimes make up 50% of the cost of a plan.

The Financial Conduct Authority (FCA), the City regulator, will be stepping in to authorise and regulate the pre-paid funeral plan industry from July 2022. It has now announced how it plans to make the sector more transparent and fairer. From next summer firms will have to be authorised by the FCA to sell funeral plans and that will mean meeting strict rules on how they market their products. They “will be banned from cold-calling and from using additional fees to drive profits and commission payments to intermediaries”, says Kevin Peachey on the BBC.

Peace of mind

An added benefit of pre-paid funeral plans being regulated by the FCA is that from next July your money will be protected by the Financial Services Compensation Scheme (FSCS). So, if the company goes bust you can get your money back.

In the meantime, if you have a funeral plan, or are planning to get one, make sure someone you know understands how much you’ve paid and exactly what that covers. That way they can ensure you get what you paid for after your death. Also check exactly how the cost of your plan breaks down. How much are you paying for your funeral? How much will go on fees and commission?

“Keep the paperwork with other important documents so it is easy for your family to find,” says Peachey. And if you move house, tell your funeral-plan provider. “The cost may be different in the area you move to.”

Some customers of bust broker Beaufort Securities could suffer unexpected losses, says John Stepek.

When you invest with a stockbroker, your assets are ring-fenced from the broker's own. This means that if the broker goes bust, your assets remain intact, and the company's creditors don't have a claim on them. There may well be a delay in getting your money back, and the value of your assets may fluctuate during that time. But in principle, your assets should still be there. And if it turns out that this ring-fencing wasn't being observed by the broker, and that money has been lost or stolen, then the Financial Services Compensation Scheme (FSCS) covers up to £50,000 of any shortfall.

However, the latest stockbroker collapse has flagged up a risk that many investors may not have been aware of. Broker Beaufort Securities was shut down by the UK financial regulator, the Financial Conduct Authority (FCA), in early March, after the US authorities charged the company with being involved in fraud and money laundering. PricewaterhouseCoopers, the administrator, reckons that in a worst-case scenario it could take up to four years, and cost up to £100m, to return the £550m in cash and assets held by clients of Beaufort. The obvious question is: who foots the bill?

And the answer, at least in part, is Beaufort's private-investor clients. While creditors have no claim on these assets, the FCA's special administration scheme means that administrators can cover their costs out of clients' money. To be specific, around 700 customers (out of 15,000) with portfolios worth more than £150,000 could endure haircuts of as much as 40%.

This is unfortunate for investors with the defunct Beaumont, but it's also worrying for anyone with a reasonable-sized pension pot. John Lee, a Liberal Democrat peer, notes that the idea of funds being up for grabs to pay an administrator hardly inspires confidence in dealing with smaller brokers. He is using his position in the House of Lords to pressure the government to fix this. Big brokers must also realise that any sort of uncertainty as to the security of their clients' assets is a major potential business risk they should be equally keen to see this issue tackled.

But what can you do meanwhile? Ultimately, Lee is right you have to consider the solvency of your broker. You could go to Companies House and check their accounts, but in practice, it's more likely to mean that more people will use the big brokers for the lion's share of their funds, and keep holdings with smaller specialists below the FSCS limit is hardly the way to encourage a competitive, healthy market.

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The increasingly desperate search for income in a world of falling interest rates has meant that peer-to-peer (P2P) lending where investors lend money directly to firms and individuals through websites such as Zopa,RateSetter and ThinCats has exploded in recent years.More than £500m in loans were originated through RateSetter alone last year.

It has also received a lot of encouragement from the government, who see it as a way to make the financial sector friendlier to small and medium-sized firms, as well as cushioning the blow for savers. Official measures to encourage P2P lending include the introduction of the innovative finance individual savings account (Isa) earlier this year, which lets investors make P2P loans from within a tax-free saving and investing wrapper.

The idea behind P2P is both simple and extremely seductive. Instead of putting your money in a savings account and earning whatever paltry rate of interest the bank deigns to offer, you can cut out the middleman and effectively become a banker yourself. However, unlike a traditional savings account, P2P investments mean that your capital is at risk: if the people or firms to whom you lend default on their repayments, you may suffer losses and these will not be covered by the Financial Services Compensation Scheme (FSCS).

P2P websites have tried to address this problem. First, they argue that their quality control, combined with investors spreading their money over a wide range of loans, can keep risks to minimal levels. When they first became established, the various P2P websites took great pains to emphasise their very low default rates. For example, RateSetter says that their loans made in 2011 have had a default rate of 0.59%.

However, there are concerns that this could change as the amounts lent increase and standards fall. In March, Adair Turner, the former head of the Financial Services Authority (the UK's previous financial-services regulator, which has now been replaced by the Financial Conduct Authority), warned that losses from P2P loans in the next decade "will make the worst bankers look like lending geniuses". Unsurprisingly, Turner's remarks drew a lot of criticism and derision from the P2P industry.

Indeed, several figures have argued that his failure to spot the subprime crisis meant that he had little credibility where lending or the financial system were concerned. However, the latest figures from RateSetter raise the question of whether he is sounding the alarm at the right time.

RateSetter recently reported that defaults on loans originated in 2014 already have a default rate of 2.81%, compared with an expected level of 2.1%. Since loans originated in a specific year can last for up to five years, ultimately total defaults for loans made in 2014 are likely to climb even higher.

At the moment, RateSetter diverts a certain proportion of the interest payments into a fund earmarked to cover defaults, known as the Provision Fund (Zopa also does something similar). The size of this fund is based on its own estimates of future losses plus an additional default rate of 0.5% as a buffer. If actual defaults exceed the estimates by more than the value of the buffer, investors may end up with losses.

RateSetter says it still thinks "that the Provision Fund will cover all defaults in 2014". It also says that since most defaults occur before a year, additional losses on the 2014 tranche "are expected to flatten out in future". That said, it's not obvious why loans made in 2014 should be suffering a spike in defaults, given that economic conditions have been favourable. Investors should take this as a reminder that P2P is not a riskless way to earn a bank-account-beating return.