Current Best Rates at a Glance
Rates shown are the highest available from FCA-authorised UK providers as of February 2026. Always verify the current rate directly with the provider before opening an account, as rates change frequently.
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Easy Access Savings Accounts
Easy access accounts let you deposit and withdraw money whenever you need it — usually with no penalties or notice periods. In 2026, competition among digital banks has pushed the top rates to 4.75–5.00% AER, representing excellent value compared to the near-zero rates of 2021.
How Easy Access Accounts Work
You deposit a lump sum (most accounts accept from £1 upwards), and interest accrues daily or monthly. The interest rate is variable, meaning the bank can change it at any time — usually in line with the Bank of England base rate. Many accounts restrict the number of free withdrawals per month (typically 3–5) without penalty.
| Provider Type | Typical Rate | Min Deposit | Key Feature |
|---|---|---|---|
| Digital challenger banks | 4.75–5.00% | £1 | Instant access, app-based |
| High-street banks | 1.50–3.50% | £1–£100 | Branch access, familiarity |
| Building societies | 3.50–4.80% | £1–£1,000 | Often member benefits |
| Notice accounts (32-day) | 4.50–5.10% | £500 | Better rates for patience |
Fixed-Rate Savings Bonds
Fixed-rate bonds offer a guaranteed interest rate for a set term — typically 1, 2, 3 or 5 years. In exchange for locking your money away, you receive a higher rate than most easy access accounts. You generally cannot withdraw funds during the term without paying a penalty (typically 60–180 days' interest).
2026 Fixed-Rate Bond Rates
The inverted yield curve seen in 2026 means shorter-term bonds pay slightly more than longer terms. This reflects market expectations that the Bank of England may cut rates further over the next 2–5 years. If you believe rates will rise, shorter terms allow you to reinvest at better rates sooner. If you believe rates will fall, locking in a 5-year rate now secures today's relatively high rates.
Regular Savings Accounts
Regular savings accounts offer the highest headline rates — up to 8% AER — but come with important restrictions. You typically must be an existing current account customer and can only deposit a limited amount each month (usually £200–£500).
Leading Regular Savings Rates 2026
| Provider | Rate | Monthly Limit | Requirement |
|---|---|---|---|
| First Direct | 8.00% AER Top Rate | £300/month | 1st Account holder |
| Halifax | 7.50% AER | £500/month | Halifax current account |
| Nationwide | 8.00% AER | £200/month | FlexAccount or similar |
| Lloyds Bank | 6.25% AER | £400/month | Club Lloyds account |
| Santander | 7.00% AER | £200/month | Santander current account |
Because you can only deposit small amounts each month, the effective annual return on a regular savings account is roughly half the advertised rate when compared to depositing the full annual amount at once. For example, saving £300/month at 8% earns approximately £156 over 12 months — equivalent to a 4.3% rate on the year's average balance of £1,950.
Cash ISAs: Tax-Free Savings
A Cash ISA (Individual Savings Account) lets you earn interest completely tax-free. The annual ISA allowance is £20,000 per tax year (6 April to 5 April). Unlike regular savings accounts, interest in a Cash ISA does not count toward your Personal Savings Allowance and is never subject to income tax — regardless of how much interest you earn.
Cash ISA Types in 2026
- Easy Access Cash ISA: Flexible, rates typically 4.3–4.7% AER. Some are "flexible ISAs" allowing you to replace withdrawn money in the same tax year without losing the allowance.
- Fixed-Rate Cash ISA: Guaranteed rates up to 4.7% AER for 1 year. Ideal for locking in rates if you believe the base rate will fall.
- Notice Cash ISA: Requires 30–120 days notice for withdrawal; rates between easy access and fixed.
Who Benefits Most from a Cash ISA?
Cash ISAs are most valuable for: higher-rate taxpayers who only get £500 PSA and breach it easily; additional-rate taxpayers with no PSA at all; and anyone with large savings balances who expects to exceed their PSA over time. Basic-rate taxpayers with savings under £20,000 often get the same effective rate outside an ISA while keeping more flexibility.
Premium Bonds
Premium Bonds are a unique savings product from National Savings & Investments (NS&I), backed by HM Treasury. Instead of paying interest, each £1 bond gives you one entry into a monthly prize draw. Prizes range from £25 to £1 million and are completely tax-free.
Key Premium Bond Facts 2026
- Prize fund rate: 4.40% (equivalent average return)
- Minimum holding: £25 | Maximum: £50,000 per person
- Monthly prize draws: Prizes distributed to approximately 1 in 21,000 bonds each month
- All prizes are tax-free and do not count toward your PSA
- Capital is 100% safe — guaranteed by HM Treasury
- You can withdraw your money at any time (working days)
How to Build a Savings Ladder
A savings ladder is a strategy for maximising returns while maintaining regular access to some of your funds. You split your savings across multiple fixed-rate bonds with different maturity dates. As each bond matures, you reinvest the proceeds at the best available rate at that time.
Example Ladder with £40,000
Split £40,000 equally: £10,000 each into 1-year (4.70%), 2-year (4.50%), 3-year (4.35%), and 5-year (4.20%) bonds. After year 1, your £10,000 (plus ~£470 interest) matures — reinvest at whatever rate is best. After year 2, your next tranche matures, and so on. This approach ensures you never have all your money locked up at once while still capturing fixed-rate premiums over easy access.
Personal Savings Allowance & Tax Implications
The Personal Savings Allowance (PSA) was introduced in April 2016 and allows most savers to earn interest tax-free up to certain limits each year.
| Tax Band | Income Range | PSA | Tax on Excess |
|---|---|---|---|
| Basic Rate 20% | £12,571–£50,270 | £1,000 | 20% on excess interest |
| Higher Rate 40% | £50,271–£125,140 | £500 | 40% on excess interest |
| Additional Rate 45% | Over £125,140 | £0 | 45% on all interest |
| Non-Taxpayer | Under £12,571 | £5,000* | No tax (+ starting rate) |
*Non-taxpayers may also benefit from the £5,000 savings starting rate band at 0%, meaning up to £6,000 of savings interest can be tax-free. You need to claim this via a R40 form or self-assessment.
Interest from Cash ISAs and Premium Bond prizes are always tax-free and do not count toward the PSA, regardless of your income.