Get the best rate on your savings - now!

With more savings accounts being withdrawn from the market, if you haven't switched to a better account recently, now's the time to do it.

When was the last time you checked the interest rate on your savings account? Whether your savings are tucked away in a tax-free cash ISA, or you’ve got a bit of money stashed in an easy access savings account, the interest rate may well have changed since the last time you looked.

Unfortunately, thanks to variable interest rates and temporary bonuses, savings rates have a habit of changing on a regular basis. And unless you have your eyes glued to your savings account every day, it can be far too easy to lose track of how much interest your savings are earning.

Recent question on this topic

• Geepea asks:

  I used lovemoney link in 2009 to subscribe to Santander Flexible ISA offering 3% on base. Statement shows only 1,5% interest, anyone else have this?

  • 
    MikeGG1 answered "When did you invest?  If it was only 6 months before the interest date then that would account..."
  • 
    Geepea answered "I invested on 1st April 2009 and thought that 12 months later I would see more than 1.5% interest...."
  • Read more answers

If you have an ISA, you should be aware by now that the ISA deadline is looming (5 April). And that means you only have a matter of days to ensure you’re getting the very best deal on your cash ISA. If you’re not sure what rate your ISA is paying, check it, and if you’re not happy, find a better account! You can read all about the best cash ISAs in The top 16 cash ISAs.

Obviously there’s not quite so much pressure for easy access savings accounts. But just because you don’t have a deadline to work to, that’s no excuse for failing to check whether there’s a better savings account out there for your money. After all, if your savings are earning a pitiful rate of interest, why put up with it any longer?

Time to switch

The past year or so has been particularly tough for savers, and trying to find a savings account with a decent rate of interest can be a challenge. Unfortunately, lenders seem to have it in for savers, and just recently, several of the top paying instant access accounts have seen their rates slashed.

For example, not so long ago, we mentioned the Coventry Building Society 1st Postal Account, which paid a competitive interest rate of 3.15%, including a bonus rate of 1.15% for the first year. Since then, that account has been withdrawn for new customers.

Instead, the Coventry’s top paying instant access accounts (with no age restrictions) are the NetSave Instant III account, and the CallSave Instant II account – both of which pay a paltry 0.5%!

Similarly, the competitive AA Internet Extra Account has also been re-issued at a lower rate of 2.80% (with a bonus of 2.30%) - compared to the previous 3% it was offering. Not a massive difference, but given the base rate hasn’t changed for the past year, it seems a little unfair that interest rates on savings accounts are still being cut.

The Investec High 5 Account has also just been withdrawn to new customers – this account had paid the average of the five highest savings rates on the market as published by Moneyfacts - so it was a pretty good option to consider, providing you had £25,000 to invest. Although existing customers will not be affected by this, a maximum deposit limit of £100,000 will be implemented.

What’s more, if you took out a savings account a year ago and it included a bonus rate, the bonus rate will no doubt have expired by now. In which case, your savings rate may now be pretty uncompetitive. After all, many bonuses are now fairly significant in size, and as a result, once that bonus comes to an end, you could be left with an interest rate close to zero.

So rather than simply assume you’re still getting a good interest rate on your savings, take the time to check out what rate of interest you are being paid, and if it’s not to your satisfaction, get switching!

The best easy access accounts

If you’re looking for a new easy access savings account, the chart below highlights the top five accounts on the market:

The West Bromwich Building Society Direct Bonus Account 1 is clearly the best account, paying an interest rate of 2.92%. This is a pretty decent rate for an instant access account nowadays. However, the downside is that you will need a deposit of at least £1,000 and this is only available to new customers.

Be warned that this account also includes a 1% bonus until the end of January 2011. So once that period is up, the interest rate on the savings account may no longer be so competitive and you’ll need to switch savings accounts yet again.

The Halifax Web Saver Extra is the only account in the table which does not have a bonus, and again, it offers a competitive rate of 2.80%. That said, there is an extra 0.20% bonus for current account customers for the first year, which means that if this applies to you, you’re better off with this account than the West Bromwich Direct Bonus Account.

However, the major drawback with the Halifax Web Saver Extra is that it only allows one penalty-free withdrawal per year. So if you know you’re likely to need access to your savings on a more regular basis, this account is probably not the best option for you.

Related how-to guide

Build up your savings

Here's how to get into the savings habit, find forgotten money, work out the real value of a savings rate and build up that emergency savings pot.

See the guide

Go fix it

Of course, the problem with instant access savings accounts is that their interest rates are variable – so they could change at any time. Bonus rates provide a temporary guarantee that the interest rate won’t drop below a certain level (providing the bonus is fixed), but of course, once that bonus expires, you may well be left with an uncompetitive savings account.

So if you’d prefer not to worry about variable interest rates, you could consider investing in a fixed rate bond instead. Just bear in mind you’ll need to be prepared to tie up your funds for a set period of time.

Right now, the best paying one year bond is from the Punjab National Bank which is offering an interest rate of 3.50%. However, to qualify for this rate, you’ll need a minimum deposit of £100,000. Alternatively, you could consider the Post Office Growth Bond which offers an interest rate of 3.30% fixed for a year. This requires a minimum deposit of £500.

If you’re prepared to lock up your funds for a little longer, the ICICI HiSave Fixed Rate Account is offering an interest rate of 4.10% fixed for two years, or 4.60% fixed for three years. You’ll need a deposit of at least £1,000 for both of these accounts.

Just remember that with a fixed rate bond, you won’t be able to access your funds until the term of the bond comes to an end.

So don’t wait any longer – check your savings rate today and if it’s looking a little sorry for itself, get switching to a better account!

More: Earn 4.6% on your savings tax free! | Ditch these shocking savings accounts