The Seven Best Savings Accounts

We all want different things from our savings accounts. With this in mind, we've taken a look at the best in each category. There's something here for everyone!

Choosing the right savings vehicle can be tricky. The main things to consider are the interest rate, whether the interest rate has any guarantees, and what the maximum and minimum balances are. Other considerations might be how quickly you can access the money, when the interest is paid (i.e. monthly or once a year) and whether you want to make regular contributions, as opposed to depositing a lump sum. Here are the best accounts in their categories.

The best for instant access is the Birmingham Midshires Internet Easy Access, with an interest rate of 5.2% per year (the 'AER' rate), which is 4.16% after basic rate tax. The minimum balance is £1 and the maximum £5m. The downsides are that there the rate isn't guaranteed (i.e. Birmingham Midshires can change it when they feel like it) and the interest is paid just once a year on the anniversary of the account opening, so it may not appeal to those who wish to withdraw a regular income.

The best instant access accountwhich pays monthly interest and has a guaranteed rate is the ICICI Bank HiSave account, with 5.15% AER, or 4.12% net (after tax). The minimum balance is £1 and there is no specified maximum. The rate is guaranteed to be at least 0.25% above the Bank of England base rate until 31 December 2007.

The next best instant access account with an interest rate guarantee is the Bradford & Bingley eSavings 2 account, with 5.1% AER, 4.08% net. The rate is guaranteed to be at least 0.25% above the Bank of England base rate until 30 June 2007. The negatives are that the interest is paid once yearly and that you need to maintain a balance of at least £1,000. The maximum balance is £2m.

Another instant access account which pays interest on a monthly basis and has an interest rate guarantee is Capital One Savings' Easy Access Savings account, with 5% AER, or 4% net. It's guaranteed to at least equal the base rate until 30 June 2008. The minimum balance is £500 and the maximum £1m.

The best notice account is the Nottingham Building Society Postal Tracker, which pays 5.3% AER, or 4.24% net. It's guaranteed to be at least 0.25% above the base rate until October 2007. The less attractive qualities are that interest is paid yearly, the notice period is 30 days and the minimum balance is £1,000. The maximum balance is £250,000.

The best regular saver account is the Alliance & Leicester Regular Saver, with an interest rate of 12% AER, or 9.6% net. This is fixed for a year, which is when the money is transferred out of the account. Interest is paid on the anniversary, the minimum contribution is £10 per month and the maximum is £250. Also, the minimum age is 21.

The best mini cash ISA is the National Savings & Investments Direct ISA, with 5.3% AER. As it's an ISA, you pay no tax. This rate is guaranteed to remain 0.55% above the base rate until April 2008. Interest is paid each year, the minimum balance is £1,000 and the maximum £3,000.

You might also want to take a look at Coventry Building Society's Family First account, which includes a rate of 7.25% AER (5.8% net) for Child Benefit paid into it and 5.25% on all other savings. Coventry also has some savings accounts for the over 60s that you might consider with rates up to 5.5% AER (4.4% net).

All data is supplied by Moneyfacts, who provide the data for most of The Motley Fool's comparison tables.

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