The top 15 easy access savings accounts

Looking for a new home for your savings? Then look no further...

You’d have to have had your head under a rock for the past few years not to know that savers are getting a raw deal right now. Poor returns on savings accounts mean that many savers have lost all interest in investing their money with banks and building societies. And really, I can’t blame them.

However, on the positive side, lenders are slowly beginning to increase the interest rates on their savings accounts. So if you are looking for a new home for your savings, now could be the perfect time to find one.

With that in mind, let’s take a look at some of the best easy access savings accounts on the market:

The top 15 savings accounts

The table below highlights 15 of the top paying easy access savings accounts:

Up close

As you can see, the very best easy access savings account on the market is the Coventry BS Family Saver, paying an interest rate of 3% (including a bonus of 1% for the first year). You’ll only need £1 to open the account and you can make as many withdrawals as you like.

However, the major drawback to this account is that you can only apply if you have children under 16 and you’re receiving Child Benefit. You need to get that Child Benefit paid directly into the account (HMRC can do this for you).

As this will rule out many of us, your next best bet is the Nationwide MySave Online Plus, paying a competitive 2.95%. You’ll need a slightly larger deposit of £1,000 to open the account and it’s worth noting that the rate includes a bonus of 1.41% for the first year. So the interest rate is likely to drop significantly after those 12 months are up and you may need to move your savings elsewhere.

You should also note that you won’t be able to make more than one penalty-free withdrawal per year. Further withdrawals are subject to a loss of bonus and a lower interest rate of 0.10% in the month the withdrawal was made.

If that doesn’t float your boat, the Post Office Online Saver and the Santander eSaver both offer a slightly lower rate of interest at 2.90%, and there are no withdrawal restrictions.

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Again, however, both include bonus rates, but with the Santander eSaver you’ll have to be extra careful because the bonus rate is variable. That means the entire interest rate on the account (not just the non-bonus part) could change at any moment – and it’s more likely to go down than up.

In contrast, the 1.25% bonus rate on the Post Office Online Saver is fixed for the first year – so you can be reassured that the rate won’t fall below that level for 12 months.

Personally, however, I like the ING Direct Savings Account. Although it offers a lower rate of interest, at 2.80%, this rate is guaranteed for the first year. So you don’t need to worry about bonus rates and you’ve effectively got a fixed rate account with no withdrawal restrictions!

Of course, once the first year is up, and the rate falls to 0.50%, you will need to find a more competitive account. But in these uncertain times, I think having the reassurance that you can earn a decent interest rate for 12 months is pretty good!

Beating inflation

With the Consumer Price Index (CPI) annual inflation rate having risen to 4%, and the Retail Prices Index (RPI) having gone up to 5.1%, finding a savings account that beats inflation is a challenge to say the least.

In fact, basic rate tax payers must now find a savings account paying 5% if they want to beat inflation, while higher rate tax payers need to find one paying 6.67%. As a result, none of the accounts above beats inflation.

Fortunately, however, there are a few inflation-beating accounts on the market.

The Post Office has just launched an Inflation Linked Bond which tracks 1.5% above RPI, as measured in April each year. So if you invested now, the interest you would receive for the first year would depend on the RPI figure for April 2012. But it is guaranteed to beat this measure of inflation by 1.5%.

The bond went on sale yesterday (22 February) and is only available until 27 April 2011 (although it may be withdrawn earlier if it's oversubscribed). You’ll need a minimum deposit of £500.

Meanwhile, Yorkshire Building Society has launched the Protected Capital Account which is separated into two versions.

If you opt for the maturity return version of the account (called Inflation Linked Plan 2), you’ll receive the percentage change in RPI between March 2011 and March 2016 plus 1.5% on maturity.

And if you choose the annual income version of the account (Inflation Linked Plan 1), you’ll be guaranteed a yearly return of 0.1% plus the annual change in RPI over the 12 month period. You’ll need a minimum deposit of £3,000 in both cases.

You can also invest your cash ISA allowance in the Yorkshire BS accounts (£5,100), so you can benefit from tax-free savings.

Alternatively, BM Savings also recently launched an inflation linked account which pays the RPI as measured in January, plus 0.25% - you can read more about this in The new savings account that beats inflation.

However, bear in mind that these inflation beating accounts are NOT easy access savings accounts. Instead, you will need to lock up your funds for five years, so you need to examine carefully whether you think this is worth it.

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