As interest rates on savings accounts remain at the highest level in a decade due to recent Bank of England base rate increases, there has never been a more important time to get a good return on savings. While it’s possible to get up to seven percent interest, these accounts often come with restrictions on access and saving limits. Easy access accounts on the other hand allow people to withdraw money whenever it is needed which is often a much safer option.
Yorkshire Building Society’s Rainy Day Account (Issue 2) is currently one of the top savings accounts offering an Annual Equivalent Rate (AER) of 3.35 percent.
Savers can open an account with as little as £1 and save as much as they wish.
However, the 3.35 percent rate is only on balances up to £5,000, while a 2.85 percent rate is given to balances over £5,000.01.
Withdrawals are permitted on two days per year based and customers can close the account at any time.
The building society has also recently launched a new account helping people save money ready for next Christmas.
The Christmas Regular Saver account is offering an interest rate of 4.5 percent on savings up to £3,600.
This account allows customers to deposit between £1 and £300 per month and they can access their savings on one day in the year without penalty.
Chris Irwin, director of savings at Yorkshire Building Society said: “For some people, it may also show that saving regularly can be achievable and if the habit is maintained after Christmas, it will help start to build up a healthy savings pot.”
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Money.co.uk’s savings expert, Lucinda O’Brien, highlights the Yorkshire Building Society Rainy Day Account (Issue 2) as the top paying easy access account right now.
She added that people shouldn’t forget ISAs either as the deadline to use this year’s tax-free ISA allowance is fast approaching.
Ms O’Briend said: “As we near the end of February, it’s important to note savers have until April 5 to make the most of this year’s tax-free ISA allowance – which is £20,000.
“With this in mind, keep an eye on the latest ISA interest rates as they have become more favourable in recent months.”
The savings expert also mentioned the Paragon Triple Access ISA (Issue 12) which is currently offering a rate of 3.1percent.
She added: “If you are prepared to lock away your savings for a year, you can take advantage of Barclays 1 Year Flexible Cash ISA Issue 36 which stands at 4.0 percent.
“Remember, everyone has a Personal Savings Allowance, entitling a basic rate tax-payer to earn £1,000 in interest before they are taxed.
“However, if you are earning more money in interest then an ISA is worth exploring for tax-free benefits.”
When it comes to savings accounts with high interest now, savers can get an Annual Equivalent Rate (AER) of seven percent interest on savings with first direct’s Regular Saver but only up to £3,600 per year.
Withdrawals are not permitted throughout the duration of the 12-month term.
NatWest’s Digital Regular Saver customers can get an AER of 6.17 percent.
The 6.17 percent interest rate is applied to savings up to £5,000, after which it drops to 0.65 percent.
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