Best savings accounts in January 2025

What are the different types of savings accounts?

Before you start looking at different accounts, it’s a good idea to understand the different types of savings accounts available to help work out which suits what you need. An easy-access savings account sometimes called an instant or flexible savings account, allows you to access your money whenever you need to. This is typically the type of savings account you might have with your current account provider. The main drawback is that the interest rates offered by these accounts tend to be variable, meaning they can change, and they may not offer the best rate offered on the market.

Fixed-rate savings accounts typically offer better rates than easy-access savings accounts, and your rate will be locked in for a set time frame, normally 1-5 years. But you’ll need to be happy with not being able to access your money during that time frame. Because of this, these accounts are better suited for long-term saving, so if you need access to your money instantly this might not be the account type for you.

You can also get notice savings accounts, which can be a halfway house. They can offer better rates than easy-access accounts, but your money is more accessible than fixed-rate accounts. You’ll just have to hand in a notice before you need your money - this could be as short as 30 days before you need your funds, or as long as 180 days.

One thing to keep in mind is that the interest earned within these savings accounts might be subject to income tax, depending on your income and tax-band. If you’re a basic-rate taxpayer, you’ll be able to earn up to £1,000 of tax-free interest each tax year, thanks to your Personal Savings Allowance (PSA). If you’re a higher-rate taxpayer, your PSA allowance is £500. 

If you want to protect your savings interest from tax, one way of doing this is to save your money into a Cash ISA. You can save up to £20,000 in a Cash ISA each tax year or spread this allowance across multiple ISA types including Stocks and Shares ISAs, Lifetime ISAs and Innovative Finance ISAs.

Find out more: Do you pay tax on your savings?

Best easy access savings accounts

GB Bank currently offers the best easy access account in the UK at 4.86% AER (variable tracker). The next best easy access savings account in terms of rate is 4.85% AER (variable) from Chip.

Let's get into the details...

1. GB Bank

• Interest rate: 4.86% AER (variable tracker) for the first 12 months, thanks to a 0.46% bonus received after 12-months saving on balances up to £25,000, meaning that if you deposited £25,000, you could earn up to £1,215 in interest after your first year of saving.
• Interest paid daily
• Minimum deposit: £0 
• Withdrawals : Unrestricted next-working day withdrawals.
• Open an account via the app

2. Chip

• Interest rate: 4.85% AER (variable tracker) for the first 12 months, thanks to a 1.03% bonus after your first year. However, after your third withdrawal, your interest rate will revert to either 3.75% AER (variable tracker) with boost applied or 2.72% AER (variable tracker). 
• Interest paid monthly
• Minimum deposit: £0 
• Withdrawals : Up to three withdrawals every 12 months
• Open an account via the app.

3. Sidekick

• Interest rate: 4.75% AER (variable tracker) for the first 12 months, including a 0.45% bonus for 12 months on balances up to £35,000.
• Interest paid daily
• Minimum deposit: £0 
• Withdrawals : Unlimited, next-working day withdrawals
• Open an account via the app

4. Flagstone

• Interest rate: 4.62% AER (variable) 
• Interest paid daily
• Minimum deposit: £10,000
• Withdrawals: Unlimited, next-working day withdrawals
• Open an account online 

5. Buckinghamshire Building Society

• Interest rate: 4.60% AER (variable), however, this drops to 2.25% AER (variable) when 2 or more withdrawals are made per calendar year.
• Interest paid yearly
• Minimum deposit: £10,000
• Withdrawals: Once a year
• Open an account online 

If you don’t need easy access to your money, you could get a more competitive rate by fixing for a set period. We’ve picked out some of the best fixed savings accounts below, but the best account for you will depend on how much you’re able to save and how long you’re willing to lock your money away. 

Best fixed rate savings accounts

Right now, there’s little difference between the top easy access savings accounts and the top fixed-rate accounts. However, there are two things to consider. One, interest rates have been coming down recently, which could mean rates on variable, easy access savings accounts come down too. Locking in a fixed rate now could help you benefit from a higher rate of interest for that bit longer. 

Two, will you need instant access to your money? If yes, a fixed-rate account isn’t for you. If not, then this type of account could be the right choice - it all depends on how flexible you want your money to be. Luckily, there are a number of short-term fixed rate savings options if you don’t want to lock your money away for a long time:

1. Zenith Bank UK

• Interest rate: 4.8% AER (fixed) 
• Duration: 6 months
• Interest paid at end of 6 month fixed period.
• Minimum deposit: £1,000
• Open an account online

2. Hampshire Trust

• Interest rate: 4.77% AER (fixed) 
• Duration: 6 months
• Interest paid at end of 6 month fixed period.
• Minimum deposit: £1
• Open an account online 

3. Santander

• Interest rate: 4.87% AER (fixed) 
• Duration: 3 months
• Interest paid at end of 3 month fixed period.
• Minimum deposit: £1,000
• Open an account online 
  

3. Raisin (provided by Mizrahi Tefahot Bank Ltd)

• Interest rate: 4.85% AER (fixed) 
• Duration: 12 months
• Interest paid at end of 12 month fixed period.
• Minimum deposit: £1,000
• Open an account online

5. Monument 

• Interest rate: 4.81% AER (fixed) 
• Duration: 12 months
• Interest paid at end of 12 month fixed period.
• Minimum deposit: £25,000
• Open an account via app

Best easy access Cash ISA accounts

Depending on how much you earn and your tax band, you might find that the interest you would earn with a savings account might be subject to income tax. Keeping your money in an easy-access Cash ISA protects your money from being taxed (up to £20,000 each tax year), and can give you the same flexibility as an easy-access savings account.

Right now, the easy access Cash ISA account with the highest interest rate on the market is from Plum, which are offering 5.01% AER (variable). However, if you want a provider that has a competitive interest rate which doesn't drop off after the first year, as well as intuitive features and excellent customer service, Tembo is the better choice.

Learn more: What is a Cash ISA?

You might also like: Can I have more than one Cash ISA?

1. Tembo

• Interest rate: competitive interest rate of 4.60% AER (variable) with daily accruing interest, with no introductory rates or drop-offs after the first 12-months, earning you over £500 more in interest than if you saved with a Big 4 bank over a 5-year period. Plus, customers get access to award-winning, fee-free mortgage advice with Tembo.
• Interest paid monthly
• Minimum deposit: £10
• Withdrawals: Unlimited, same-day withdrawals with no rate change, fee or penalties*.
• Open an account via the app

*Withdrawals made before 2pm will be processed that working day, otherwise next working day.

2. Plum

• Interest rate: 5.01% AER (variable) for the first 12 months, thanks to a 1.22% bonus if you keep your Cash ISA with plum for 12 months. However, after the first 12 months is up, your rate will drop down to 3.79% AER (variable). Also worth noting is that if your balance drops below £100, or after your fourth withdrawal, your interest rate will revert to 2.50% AER (variable tracker).
• Interest paid monthly
• Minimum deposit: £0 
• Withdrawals : Up to four withdrawals every 12 months
• Open an account via the app

3. Chip

• Interest rate: 4.85% AER (variable tracker) for the first 12 months, thanks to a 1.03% bonus. However, after your third withdrawal, your interest rate will revert to either 3.75% AER (variable tracker) with boost applied or 2.72% AER (variable tracker). 
• Interest paid monthly
• Minimum deposit: £0 
• Withdrawals : Up to three withdrawals every 12 months
• Open an account via the app

4. Atom Bank

• Interest rate: 4.85% AER (variable). However, this drops down to 3.25% each month you withdraw.
• Interest paid monthly
• Minimum deposit: £0. 
• Withdrawals: Unlimited, however interest rate drops down to 3.25% each month you withdraw.
• Open an account via the app 

5. Chetwood Bank

• Interest rate: 4.66% AER (variable) 
• Interest paid monthly
• Minimum deposit: £0
• Withdrawals: Unlimited, next-day withdrawals
• Open an account online 

You can read more in our guide on the Best Cash ISAs.

Best Lifetime ISAs

A Lifetime ISA (LISA) is a tax-free savings account designed to help you save for your first home or retirement. You can save up to £4,000 of your £20,000 ISA allowance in a LISA each year, and your savings will be boosted by a 25% bonus each year you save into the account, up to £1,000!

So, if you max out your LISA three years in a row, you’ll have a sweet £15,000 stashed away for your house deposit. Buying a house with a partner or friend? If they’re also a first-time buyer, you can have a LISA each! Together, you could have a £30,000 deposit in just 3 years. 

You can only withdraw money from your LISA penalty-free for your first home or retirement. If you make a withdrawal before the age of 60 for something other than an eligible property purchase, you’ll be charged a 25% penalty on the amount you withdraw, which may mean you get back less than you put in

Take a look at our guide to the LISA withdrawal penalty to learn more. 

1. Tembo Lifetime ISA

• Interest rate: 4.60% AER (variable) - helping you save hundreds more towards your deposit over 5-years than the next best competitor on the market.
• Interest calculated daily, paid monthly
• Minimum deposit: £1
• Open an account via app
• Fee-free mortgage advice when it comes to purchasing your first home

2. Moneybox

• Interest rate: 5.00% AER (variable) but this includes the bonus rate of 0.90% AER, which is only applied for one year. After this, your rate will drop to 4.10% AER (variable). As the average first-time buyer takes years to save up for a house, it’s worth considering a LISA with a high rate of interest for longer than one year.
• Interest calculated daily, paid monthly
• Minimum deposit: £1
• Open an account via app

3. Bath Building Society

• Interest rate: 3.69% AER (variable) 
• Interest calculated daily, paid annually
• Minimum deposit: £1
• Open an account online, via app or in branch

4. Paragon Bank

• Interest rate: 3.51% AER (variable) 
• Interest calculated daily, paid annually
• Minimum deposit: £1
• Open an account online, or via phone

5. Beehive Money

• Interest rate: 3.30% AER (variable) 
• Interest paid annually
• Minimum deposit: £1
• Open an account via app