We review the easiest and best savings rates for a balance of £1,000 – you could earn the equivalent of £229 in interest and bonuses
Looking for a home for your savings?
Our new series ‘How should I save it’ runs through both the simplest and the highest interest earning options to find you the best home for your savings over a year.
All our options have a guaranteed return, are risk-free and your money is protected by the Financial Services Compensation Scheme or equivalent schemes abroad.
We've also compiled guides for saving £2,000, £5,000 or £10,000 – all of which are slightly different – so click on the links to read learn more.
I’ve got £1,000 – how should I save it?
Compare top ISAs, savings accounts and P2P investments on loveMONEY
Easy win: Put your money in a Gatehouse Bank Fixed Term Deposit
Interest earned: £20 (at 2%)
Gatehouse Bank (formerly known as Milestone Savings) offers the highest-interest one year fixed deposit account currently on the market: an expected return of 2%, no fees and you can do everything online.
Applying online takes about five minutes.
- Apply online and deposit all £1,000
- Twelve months later withdraw the entire balance
Or compare savings accounts here.
You're not exactly going to retire on that kind of return, but it is the best return for the minimal amount of effort. Willing to put in a bit more elbow grease? Read on...
Beat inflation: Get an M&S Bank Current Account and Monthly Saver
£125 M&S voucher + £27.39 cash
M&S offers customers a £125 voucher just for switching to its Current Account, which is linked to a Monthly Saver account which pays an inflation-beating 5% interest.
You can apply for these accounts online but note that as the Current Account has an overdraft applying involves a credit check.
You’ll need to use M&S’ Current Account Switch Service then set up a standing order between your Current Account and Regular Saver.
- Apply for an M&S Current Account online and deposit your £1,000 PLUS money to cover your two direct debits
- M&S will provide the £125 voucher within a month of switching from your old current account
- Then apply for an M&S Monthly Saver online with a standing order of £83 per month.
- Wait 12 months before accessing your Monthly Saver account, otherwise, you will lose your high interest rate.
If you're an existing M&S customer, follow this strategy but switch to first direct's Current Account and linked Regular Saver instead - you'll receive a similar value in terms of vouchers and interest. Want to earn even more? It can be done…
Top return: Set up a Halifax Reward Current Account and an M&S Bank Current Account and Monthly Saver
Interest earned: £125 M&S voucher + £104.37 cash
Halifax offers £75 for switching to its Reward Current Account, whilst M&S offers customers a £125 voucher. M&Ss Current Account links to a Monthly Saver account which pays an inflation-beating 5% interest.
You can apply for all three accounts online but as two of them are current accounts with overdraft they involve credit checks, so keep this in mind.
You will have to use both M&S’s and Halifax’s switching services, which close your old current account and you’ll need two direct debits to transfer.
- Apply for Halifax’s Reward Current Account online, switch over your existing bank account and transfer your £1000 PLUS money to cover your two direct debits
- Halifax will put £75 cash into your account within 7 working days of switching from your old current account
- Apply for an M&S Current Account online and switch your direct debits and your £1075 PLUS money to cover your two direct debits
- M&S will provide the £125 voucher within a month of switching from your old current account
- Then apply for an M&S Monthly Saver online with a standing order of £89 per month.
- Wait 12 months before accessing your Monthly Saver account, otherwise, you will lose your high interest rate.
If you're an existing M&S customer, follow this strategy but switch to first direct's Current Account and linked Regular Saver instead - you'll receive a similar value in terms of vouchers and interest.
Other current accounts and savings accounts are available - these are just the best strategies we could find at the time of writing. If you can think of a strategy for higher returns – without putting your money at risk – please add it to the comments below.