With the cost of living soaring, it’s more important than ever to ensure you’re getting as much in interest as possible from your cash savings.
Easy-access savings accounts usually enable you to take your money out whenever you want, without any loss of interest. It’s generally considered wise to have three to six months’ worth of essential spending in an easily accessible account to cover any unexpected costs, such as car repairs or a boiler breakdown.
For example, AI Rayan Bank, which is the oldest and largest Islamic bank in the UK, is paying an expected return of 1.6% on a minimum deposit of £5,000 on its Everyday Saver. Instead of paying interest, the bank invests deposits in ethical, Sharia compliant activities to produce a profit. Profit rates are expected, but not guaranteed, but the bank has always paid at least the profit rate to its customers since it launched in 2004.
Elsewhere, Virgin Money is paying 1.56% AER on deposits from £1 to £25,000 to new and existing current account customers on its M Plus Saver. Meanwhile, Shawbrook is paying 1.52% AER on a minimum deposit of £1,000, but you can only withdraw a minimum of £500 at a time.
Fixed-rate bonds usually pay more than easy access accounts, but you can’t withdraw money from this type of savings account before the term ends without penalty. If you need the money, you can close the account, but this will mean some charges, such as loss of interest. However, you will have the security that the interest rate will remain the same until the end of the account term. Find more information about these accounts and the top rates in our article Fixed rate savings bonds explained.