Earn 7.15% Interest On Your Spare Cash

If you're looking for a tip-top return on your savings, regular saver accounts often offer the best rates.

This article was first sent to Fools as part of our 'Summer Lolly' email series.

If you're looking for a tip-top return on your savings, regular saver accounts often offer the best rates.

Take Halifax for instance. For a whole year, the new Halifax Regular Saver offers a brilliant, no strings attached, fixed rate of 10 per cent on monthly savings of £25 to £500 a month.

Trouble is, these accounts aren't quite so good if you have a lump sum going spare.

Think of it this way: with regular savings you won't earn interest on all of your savings from day one. Instead, you'll build up interest on a low balance to begin with, which gradually increases over the year.  If you put away the maximum savings of £500 a month into the Halifax account, you'll only earn £325 in interest after twelve months.

That's fine if you don't have all the money available upfront. But if you do have £6000 going spare, and you were able to put it all in a 10% savings account on the first day, you would receive a far more impressive £600 at the end of year one.

Sadly, there aren't any savings accounts which pay 10 per cent on lump sum balances. Banks just aren't that generous! But that doesn't mean you can't get a great rate. Here are some options...

If you're happy to lock your cash away for a year or more, think about putting your lump sum into a savings bond.

Savings bonds are great for three reasons:

1.       The rates are fixed so you don't need to worry that the market-leading rate you get today could vanish tomorrow.

2.       You can't usually make any withdrawals during the term. This removes the temptation to squander your cash. However you will need to plan ahead and make sure you don't need access early.

3.       The rates are very good too. And you'll earn that rate on all your savings from day one.

Take a look at the best bonds that are on offer right now:

Top Six Fixed Rate Savings Bonds

*Minimum deposit is £5,000 for bonds paying monthly interest rather than annually. ** The Post Office, Anglo Irish Bank and West Bromwich Building Society also offer fixed rates bonds which pay 7.05%.

All these bonds will provide you with far more interest after a year than you would get by saving every month with the Halifax Regular Saver. So don't be fooled by an eye-catching rate.

Better still, you won't need a small fortune to qualify for rates above 7% either. Half of the top six can be opened with just £1. But don't forget, most bonds can't be topped up, so you'll need cash available in advance to make the most of it.

If the idea of locking your money away for a year or more is too much of a commitment, try a notice account instead.

Top Notice Accounts (with better rates than easy access accounts)

These best-buy accounts can be accessed after two to three months notice, so they're no good if you're likely to need cash out of the blue. But with a bit of planning you can enjoy great rates which beat the best of the easy access accounts. 

For those of you with a reasonably large sum to save, the High Five account from Investec is interesting because the rate is determined by the average of the five highest savings rates available (as published by data website, Moneyfacts). This means the account will always provide one of the most competitive rates on the market.

But there's no doubt, bonds and notice accounts may not be a flexible as you need them to be. If you like to be able to get your cash in a flash, an easy access account is a probably a better bet.

There are a whole clutch of accounts paying well over 6 per cent. Try Birmingham Midshires' e-Saver (Issue 2) which pays a market-leading 6.52 per cent or Bradford & Bingley's Interest Saver 3 which pays 6.51 per cent, but guarantees to match the base rate -- at least -- until 1 January 2010.