Seven savings accounts currently offer some of the best rates on the market, with top payers providing up to 6% interest. For those with savings built up or looking to start a rainy day fund, several accounts can be used simultaneously to maximise tax-free interest.
Tax-free savings threshold
The first £1,000 of savings interest earned is tax-free for those earning under £50,270, even if the money is not held in an ISA. This means savers can take advantage of multiple accounts to boost their returns without incurring tax.
Accounts from Santander, Chase, and lesser-known names like Spring are offering inflation-beating rates. Money Saving Expert founder Martin Lewis advises: "The first place to put spare money is always to build up a cash emergency fund of three to six months' worth of bills. But for money you won’t use for 5+ years, saving isn’t usually the winner. It's worth considering putting some of the rest in a broad spread of investment (eg, a global tracker fund that mirrors the performance of a huge range of companies)."
Top-paying accounts
Spring, part of Paragon, offers a 5% savings rate on balances from £10 up to £5,000. Cahoot, part of Santander, provides 5% on small accounts with a maximum of £3,000.
Cynergy Bank pays 4.55% with a 2.55% variable rate plus a one-year 2% bonus, but it pays on up to £1 million. Oxbury Bank offers 4.33%, with a high maximum of £120,000 and a £1,000 minimum.
