What are the best savings account rates in 2018?

We round-up the best savings accounts for the year.

Challenger banks continue to nudge rates up on easy-access accounts.  Paragon Bank has issued a new version of its Limited Access Cash Isa at a top 1.16 per cent.  It puts it just ahead of Sainsbury’s Bank which raised its Cash Isa rate for new savers last week to 1.15 per cent.

AA Savings also pays the top 1.16 per cent, but you need to move your money after 12 months. It comes with an initial bonus paid for the first year you are in the account, after which it drops to 0.2 per cent.

On taxable easy-access accounts AA Easy Saver issue 6 is the top rate at 1.32 per cent. But once again there is a bonus -  1.12 percentage points -  for the first 12 months after which your rate tumbles to 0.2 per cent. The best rate that does not include a bonus is 1.3 per cent on the RCI Bank Freedom account, followed by Nottingham Building Society Esaver at 1.25 per cent.

Challenger banks also dominate the fixed-rate bond best deals. Aldermore Bank, Atom Bank and Investec Bank all pay 1.8 per cent fixed for one year.  For two years, the best deal comes from Family Building Society at 2.06 per cent. The rate is not fixed by will rise in line with any increase in base rate over the term. Paragon Bank pays a fixed 2.05 per cent for two years. 

On fixed rate cash Isas, Virgin Money pays 1.41 per cent for one-year and Aldermore Bank 1.65 per cent for two.

How to beat inflation

To beat inflation, currently running at 3.1 per cent, compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider. Our sister publication Moneywise regularly keeps tabs on the savings market and has found there are six accounts that currently beat inflation.

-UK inflation: where’s it heading in the long term?

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