Our list of the best savings accounts on the market is continually changing as interest rates fall – but there are still good deals to be found.
Starling Bank is the latest provider to throw its hat into the ring with a new easy-access account, due to launch at the end of November.
The linked saver will be available to customers with a Starling personal current account, and will pay 4% AER. But how does it stack up versus competitors?
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The easy-access rate is comfortably above the market average of 2.98%, based on data from financial information company Moneyfacts, but other providers offer up to 5%. See our round-up of the best easy-access savings accounts.
While this means Starling isn’t the number one rate on the market, the flexibility the account offers means it could still be worthy of consideration.
The linked current account (which you have to open to qualify for the saver) also offers some attractive features.
How does Starling’s easy-access saver work?
Starling’s new easy-access account offers immediate, penalty-free withdrawals and deposits and an interest rate of 4% AER.
The rate is payable on balances of up to £1 million, although savers should remember only £85,000 is protected under the Financial Services Compensation Scheme.
The interest on the account is accrued daily and paid monthly, making it an attractive option for savers who like to complement their regular income with some savings interest.
Customers have to have a personal current account with Starling to qualify for the savings account, but the high level of interest available on the current account could also make this appealing.
Starling’s current account currently pays 3.25% AER on balances up to £5,000 – the fourth-best rate on the current account market, according to comparison site Moneyfacts.
It is worth remembering that Starling is a digital bank, meaning the account probably isn’t for you if you prefer to do your banking in person at a branch. There are some good features for the digitally-savvy, though.
Starling says customers can apply for the account “in a matter of minutes” using its app. The savings account will sit under the “Spaces” section of their current account, making it easy to see all of your accounts in one place.
“Spaces are already used extensively for money management,” the bank explains. “Starling’s personal account customers have on average at least two Spaces attached to their account, used for everything from putting aside money for Christmas to holiday spending overseas.”
Is Starling a best-buy account?
Starling’s easy-access rate is around one percentage point lower than the top rates on the market. We list the top five below.
However, it is worth reading the terms and conditions carefully when shopping around, as there are often hoops you will need to jump through to qualify for the advertised rate.
Some accounts only pay the headline rate on balances up to a certain level. Others have minimum opening amounts. Furthermore, not all accounts are flexible when it comes to withdrawals. This is the case with most of the below examples.
Top easy-access savings rates
| Account | Rate (AER) | Notes |
| Cahoot Sunny Day Saver | 5% | Can be opened with £1. Interest only paid on balances up to £3,000. |
| Atom Bank Instant Saver Reward | 4.85% | No minimum opening amount. |
| Principality Building Society Online Bonus Triple Access | 4.85% | Can be opened with £1. Rate includes a 1.50% bonus for 12 months. |
| Yorkshire Building Society Rainy Day | 4.80% | Can be opened with £1. Advertised rate paid on balances up to £10,000. 3.70% paid on balances above this amount. |
| Penrith Building Society Limited Access E-Saver | 4.71% | Can be opened with £1. Max deposit is £50,000. Six withdrawals per year including closure. |
Would you be better off fixing your savings?
The Bank of England has cut the base rate twice this year, bringing it from a peak of 5.25% to 4.75%. Interest rates are on a downward trajectory, meaning the top savings rates aren’t sticking around for long.
Against this backdrop, you might be better off fixing your savings to lock in a higher level of income for longer. Starling also offers a one-year fixed saver which pays 4.05% interest, although you can currently earn up to 4.71% with other providers by shopping around.
Mark Hicks, head of active savings at Hargreaves Lansdown, says the savings market could see a small boost in rates as inflationary pressures start to build again, but he is not expecting them to climb significantly.
“If you’re hanging on for a better deal before you fix, it’s time to stop waiting and get moving,” he says. “You can still get strong fixed rates, especially over six months to two years. So if you’re tired of worrying about what drama politics and the bond markets might hold in store, you can fix any savings you won’t need for that period and get on with the rest of your life.”
You won’t be able to access the pot of money during the fixed period, so you should only lock away any money you know you won’t need to access in the short term. Your emergency fund should always be kept in an easy-access account.
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