Bank with 2.5 million customers implementing substantial modifications in 36 bank accounts, anticipated to negatively impact account holders.
In the ever-changing world of personal finance, the UK savings market continues to evolve, offering a variety of options for savers. Despite some reductions in interest rates, there are still opportunities to secure competitive returns beyond the current rate of inflation.
One of the most significant changes this year is the reduction in the interest rates of various savings accounts. The Privilege Premier Savings account will see its rate drop from 3.53% to 3.4%, while the Future Fund account will follow suit, falling from 1.53% to 1.46% starting October 22. The interest rates on Base Rate Tracker accounts are also set to decrease, from 3.75% to 3.5% at a later date. The Co-operative Bank has announced that it will be reducing interest rates on 36 savings accounts.
However, there are still options that provide attractive returns. For instance, several savings providers still offer returns of up to 5%. The best easy-access savings account available is from Cahoot, paying 5%. Similarly, Vanquis Bank's one-year fixed bond pays 4.44%, and Atom Bank's one-year fixed bond offers 4.42%.
Besides ISAs, the UK market currently offers several types of savings accounts that provide some of the best returns. Instant-access savings accounts, like Cahoot and Chase Saver Boosted, offer rates around 5% AER on balances up to certain limits with easy access to funds. Fixed-rate bonds, with competitive interest rates between approximately 4.4% and 4.6% AER for one- to two-year terms, are also available from banks such as Vanquis Bank, Atom Bank, JN Bank, DF Capital, and GB Bank.
Regular savers accounts, which limit how much you can deposit monthly but can offer attractive interest rates and sometimes switching bonuses, are another option. For example, First Direct’s regular saver offers up to £300/month with added incentives. Children's savings accounts, such as Halifax Kids’ Monthly Saver, provide higher AERs to encourage saving for younger account holders.
In addition to these, low-risk investment products with modest but steady returns include NS&I Guaranteed Growth Bonds and Income Bonds, government-backed with fixed interest rates and full capital protection, and Money Market Funds and other low-risk investment funds.
It's wise to have some money in an easy-access savings account for emergency purposes. As a benchmark, consider any account that pays more interest than the current level of inflation (3.4%). To find the best savings rates, utilise comparison websites like Compare the Market, Go.Compare, and MoneySupermarket.
Notable mentions include Principality Building Society's Six Month Regular Saver, offering 7.5% interest, and West Brom Building Society's easy access account, which offers customers 4.55%. The Smart Saver account and the Online Saver account will also see reductions, while RCI Bank UK's 95-day notice account offers savers 4.7%.
In summary, top-performing non-ISA savings options in the UK in 2025 typically include instant-access accounts paying up to 5%, fixed-rate bonds offering about 4.4-4.6%, regular savers with good incentives, and government-backed NS&I bonds for guaranteed returns. It's essential to keep an eye on the market and adjust your savings strategy accordingly to maximise your returns.
- In the UK market, besides ISAs, several types of savings accounts offer competitive returns, such as instant-access accounts like Cahoot and Chase Saver Boosted, providing rates around 5% AER.
- For those seeking low-risk investment products with steady returns, options include NS&I Guaranteed Growth Bonds and Income Bonds, government-backed with fixed interest rates and full capital protection.
