You might feel that now is not the right time to start a savings account and if you have debts then you’d be right. It is always better to clear your debts, especially credit cards and loans, before you start saving as interest charges are far greater than any interest you may accrue in a savings account. That said, if you are in the fortunate place where you have a few pounds to spare each month and want to stash it away, rather than fritter it, look no further that these four savings accounts which give the higher interest in the market at present and the least amount of penalties should you wish to withdraw your cash.
ING Direct Savings Account – New customers can enjoy a rate of 3.10% AER (3.06% gross p.a.) variable including a 2.56% gross p.a. bonus fixed for 12 months from account opening. This rate applies from the business day following account opening on balances up to £250,000 plus resulting interest. Otherwise standard variable rate applies, currently 0.5% AER (0.5% gross p.a.). After 12 months the rate will revert to the standard variable rate. There are no charges for withdrawing your money and you can start saving from £1, with no minimum or maximum monthly deposits.
Coventry Poppy Online Saver – Enjoy a rate from 3.15% AER*/Gross p.a. (variable) including a first years bonus of 1.15% AER and invest from £1 to £250,000. You are allowed 4 penalty free withdrawals each year. For every £20,000 invested the Coventry will make a donation of £10 to the Poppy Appeal. The Coventry will make an annual donation based on total balances held on the account with £5m donated since 2008.
Lloyds 2 Yr Fixed Tracker Bond – If you have a fixed amount of cash and do not need to withdraw it for 2 years then this is the savings account for you. The rate is 3.20% AER/Gross variable which tracks at 2.70% above the Bank of England base rate (currently 0.5%) for two years. If the Bank of England base rate changes, your interest rate will change on the first working day of the following month. Interest is paid yearly on anniversary of account opening and you can save from £2,000. No withdrawals or additional deposits are allowed however.
Cahoot 2 Yr Fixed Rate – This is the best account if you have a large amount of money and do not need it for a couple of years. Earn a fixed rate of 4.01% Gross/AER for 2 years. Deposit a minimum of £25,000 up to a maximum of £2,000,000. Interest is payable annually on 1st October. No withdrawals, additional deposits or account closures are allowed during the fixed term. You do have immediate access to your money once the account matures.