February 2018: What are the best savings account rates?

We round-up the best savings accounts for the year.

Challenger banks continue to push rates up from their rock-bottom levels.

On tax-free accounts, the best easy-access rate is 1.21 per cent from Virgin Money Easy Access Cash Isa.  Paragon Bank’s Limited Edition Easy Access Cash Isa pays 1.16 per cent.

You can earn a higher 1.45 per cent fixed for one year with Paragon Money, Post Office Money and Leeds Building Society, 1.42 per cent from Oaknorth Bank and 1.41 per cent with Virgin Money.  For two years the best rate is 1.66 per cent from Virgin Money.

On taxable easy-access accounts ICICI Bank Hi-Save Bonus Saver pays a top 1.35 per cent. But the rate includes a 0.7 percentage point bonus payable until the end of January next year. Tesco Bank Internet Saver pays 1.3 per cent with a bonus paid for the first year after which it drops to its standard rate, currently 0.55 per cent.  

Top accounts with no bonus include French-owned RCI Bank Freedom account at 1.3 per cent, Ford Money Flexible Saver at 1.22 per cent and Paragon Bank Limited Edition Easy Access account at 1.21 per cent.

On taxable fixed rate bonds, the best one-year rate comes from Atom Bank at 1.95 per cent.  You operate this account through its app on your smart phone or tablet.  Secure Trust which you apply for online pays 1.86 per cent.  The top two-year rates come from Atom at 2.1 per cent and Secure Trust at 2.06 per cent.

How to beat inflation

To beat inflation, currently running at 3 per cent, compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider. Our sister publication Moneywise regularly keeps tabs on the savings market and has found there are six accounts that currently beat inflation.

-UK inflation: where’s it heading in the long term?

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