March 2018: What are the best savings account rates?

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

Savers looking for a straightforward easy-access cash Isa with no withdrawal restrictions can earn 1.21 per cent with Virgin Money’s Easy Access Cash Isa issue 23 or 1.16 per cent with Paragon Bank’s Limited Edition Easy Access Cash Isa and Sainsbury’s Bank Cash Isa. 

Another market leader is Nottingham Building Society, which pays 1.2 per cent on its Cash Isa available through its branches.  

But the top payer is Nationwide, offering 1.4 per cent on its Loyalty Single Access Isa. This rate is not widely available, though, as it is only open to those who have been a member of the building society for at least 12 months. In addition, savers limited to making just one withdrawal a year. Those who do not qualify for this deal can earn 1.3 per cent through the building society’s Single Access Isa, which is open to all.  

Elsehwhere, Oaknorth Bank has raised the rate on its one-year fixed rate cash Isa to 1.52 per cent, putting it ahead of Virgin Money, which upped its rate last week to 1.5 per cent.  For two years the best rate is 1.67 per cent available from both Paragon Bank and Charter Savings Bank. 

On taxable easy-access accounts ICICI Bank Hi-Save Bonus Saver currently pays a top 1.35 per cent.  But the rate includes a 0.7 percentage point bonus payable until the end of January next year.

Top accounts with no bonus include French-owned RCI Bank Freedom account at 1.3 per cent with no withdrawal restrictions. 

Virgin Money Double Take E-Saver 4 also pays 1.3 per cent, but limits you to making just two withdrawals a calendar year.

Ford Money Flexible Saver at 1.22 per cent and Paragon Bank Limited Edition Easy Access account at 1.21 per cent are also among the top payers. 

On taxable fixed-rate bonds, the best one-year rate comes from Investec at 1.85 per cent, followed by Oaknorth Bank at 1.82 per cent and Masthaven and PCF banks, both at 1.8 per cent. For 18 months you can fix at 1.9 per cent with Metro Bank, Masthaven or PCF Bank. 

The best fixed rates over a two year term come from Swedish-owned Ikano Bank at 2.1 per cent and Oaknorth Bank at 2.09 per cent. 

Savers have until April 5 to make use of their £20,000 cash Isa allowance for this tax year and pay no tax on the interest they earn.

How to beat inflation

To beat inflation, currently running at 3 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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