If you’re looking for the best savings account and can afford to lock your cash away for a year, you can now earn 6% interest with a fixed account. Not bad for a year’s return.
These accounts, also known as fixed-rate bonds, tend to offer better rates than easy-access savings accounts, which are ideal for anyone hoping to gain some interest while still being able to withdraw money at their convenience.
While it’s worth keeping in mind that the rates for these accounts do not beat inflation there’s still a chance for you to gain some interest with little effort and relatively no risk if you know you won’t be needing the money in the next year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Although, keep in mind, as interest rates go up, offers on cash savings may too in the coming weeks, so you’ll have to decide if it is worth waiting before fixing your savings in hope that better rates will come along.
These are the best one-year fixed-rate deals on the market at the moment. MoneyWeek uses data from Defaqto to regularly update this article. All the banks we mention are protected by the Financial Services Compensation Scheme, meaning up to £85,000 of your savings are protected should a bank go bust.
The best one-year fixed savings accounts
My Community Bank 1 Year Fixed Saver - 6.06% AER
My Community is offering a rate of 6.06% on their one-year fixed saver. You must deposit at least £1,000 to open this savings account, and you can save up to £85,000. Open and manage this account online.
Atom Bank 1 Year Fixed Saver - 6.05% AER
You can start saving this one-year fixed saver with just £50. The maximum you can deposit into the account is £100,000 and you can open and manage this saver on the Atom Bank app.
SmartSave 1 Year Fixed Saver - 6.03% AER
Open this SmartSave 1 year fixed saver with a minimum deposit of £10,000. You can save up to £85,000 in the account and you can open the saver online. Interest is paid annually.
Charter Savings Bank 1 Year Fixed Bond - 6.02% AER
Charter Savings is offering 6.02% on their one year fixed saver, which you can save with a minimum deposit of £5,000. The maximum you can save in the account is £1million and you can open the saver online.
Kent Reliance 1 Year Fixed Bond - 6.01% AER
This easy-access account is offering 6.01%. To open the account you must deposit at least £1,000 and you can save up to £1million. You have the choice to receive your interest quarterly or annually. Open online or in branch.
Cynergy Bank 1 Year Fixed Bond - 6% AER
Another bank offering 6% on its one year fixed bond. Open this saver with £1,000 and save up to £1million. Interest is paid annually and you can open this account online.
United Trust Bank 1 Year Fixed Saver - 6% AER
This one-year fixed saver lets you start saving from £5,000 and you can save up to £1million. You can open and manage this saver online and interest is paid on maturity when the one-year fixed term ends.
Investec Bank 1 Year Fixed Saver - 6% AER
Open this fixed saver with £5,000 and save up to £250,000. Interest is paid upon maturity and you can open this account online.
OakNorth Bank 1 Year Fixed Saver - 5.95% AER
You can open this saver with just £1 and the maximum deposit is £500,000. You can fund your account with multiple deposit payments within 14 calendar days from when your account opens. You can open and manage this account online or via the OakNorth Bank app.
Aldermore 1 Year Fixed Saver - 5.9% AER
Aldermore is offering 5.9% on your savings and you can open the account with a minimum of £1,000. Save up to £1million and open this account online.
Is a fixed savings account right for me?
If you need to access your cash at any given moment, fixed accounts are not the ones for you. You cannot take money out of fixed accounts until the end of the term – if you do, you will lose interest and have to pay a penalty.
If you have a lump sum sitting in an account which offers a lower interest rate, you could get more for your money by moving it to a fixed-term account. The interest rate is almost always guaranteed (except for Shariah-compliant accounts) so you know exactly what you’re going to get - and now that rates are up, you may as well earn something on your cash holdings where you can.
If you’re happy to lock your money away for longer, you have the option of two or five year fixed-rate accounts which might offer a better interest rate.
“However, if you’re looking to save for five years or more, investing gives you a better growth potential as you benefit from compounding and you have a stronger chance of making your money grow and beating inflation. But investing is not-risk free and it can take time for your money to grow,” says Kalpana Fitzpatrick, MoneyWeek’s senior digital editor and author of Invest Now.
Once a fixed period ends, you will have to open another account – either with the same bank or elsewhere.
It is also worth noting that if you fix an account and interest rates go up, you will be stuck with the rate you have until the fixed period ends.
-
August NS&I Premium Bond winners unveiled - have you scooped £1m?Two lucky NS&I Premium Bond winners are now millionaires in the August draw. Find out here if you are one of them
-
Savings rates more than double in a year as challenger banks top the best buy tables
The best savings rates have doubled - and in some cases tripled - in a year, with challenger banks offering the highest rates. While they are still no match for inflation, we look at what you could be earning.
-
Midlife MOT: what is it and who can get one?
The government has launched an online midlife MOT to help older workers with financial planning, health guidance and career skills. But how does it work, who can get one and would you pass it?
-
Coventry Building Society launches new best easy access savings account
Coventry Building Society's deal tops our easy access savings account list, but could your cash be put to better use?
-
NS&I boosts fixed-term savings rates
The NS&I, the government-backed savings institution has mirrored recent rate rises seen elsewhere in the market.
-
Should you let AI give you financial advice?
Can AI fill the financial advice gap? Kalpana Fitzpatrick looks at the pros and cons of using AI to guide your finances.
-
Small pension pots to be consolidated, says DWP
Workplace pension schemes worth less than £1,000 that become “deferred” when a saver changes jobs will be consolidated under a new system
-
Watchdog summons banks to explain paltry savings rates
Savings rates trail mortgage rates - and the financial watchdog has summoned banks to a meeting amid concerns of profiteering.
