Savings Guide

How to get the best savings rates - top 10 tips

Updated: Friday 3 June, 2011

By Hazel Cottrell - hazel.cottrell@consumerchoices.co.uk

Looking for a great interest rate on your savings? Our top 10 tips will help you find the best deal.

With the Bank of England base rate at a record low of 0.5% for the past two years, now is perhaps not the most encouraging time to look for high interest rates on your savings.

However, banks and building societies are still battling for savers’ cash and if you shop around, there are still some healthy rates to be found.

If you want to find the best savings rates for your cash, follow our top 10 tips:

1. Compare deals - This may seem obvious, but it is absolutely crucial in order to getting the best deal on your savings. Whatever type of savings account you decide to go for, it’s essential that you shop around and compare deals to make sure you get the best rate possible. Compare savings accounts now
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2. Fill up your ISA - Because of the great tax benefits, your ISA should be the first destination for savings. You can save up to £5,340 in a cash ISA each tax year (the deadline for deposits is 5 April) and any interest you receive comes to you completely tax free. This means, for example, that putting your cash in an ISA offering an interest rate of 3% will get you the same returns as if you put it in a standard savings account offering 3.75% if you are a basic rate tax payer or 5% if you are a higher rate tax payer. Check out our complete guide to ISAs now
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3. Investigate savings rates at your local building society - Smaller building societies often offer the most attractive rates. So, as well as comparing savings rates online, it would be wise to get in touch with your local building society to find out what's on offer.
4. Look at fixed-rate accounts - If you don’t need access to your cash for a year or two, locking up your savings in a fixed-rate account could earn you better returns than putting your money in an instant access account. However, if you think savings rates are on the rise, you may want to hold back and wait to lock in at a higher rate.
5. Look at regular savings accounts - If you are just beginning to save, or are willing to drip feed your savings into an account, then you should definitely check out regular savings accounts. In return for regular deposits these pay some of the best rates on the market. Read our guide to regular savings accounts for top tips on making them work for you.
6. Get a high interest current account - If your current account cash is earning a measly 0.1% then the time to switch is now. If you want to make the most of your cash you need a decent current account as well as a great savings account. The best high interest current accounts actually offer better returns than most savings accounts.
7. Make the most of introductory offers - Many banks try to lure in customers with attractive rates that drop dramatically after a year. If you want the best rates then you should make the most of these deals. But make sure you know exactly when the rate changes and make a note in your diary, so you are ready to switch to the next great deal when the time comes.
8. Keep your savings safe - If you are lucky enough to have more than £85,000 in savings then as well as looking for the best rates, it’s crucial to spread your savings around. Read our guide to safe savings for help and advice on where to store your cash, to ensure it is fully protected by the Financial Services Compensation Scheme (FSCS).
9. Renounce loyalty - With many providers offering incredibly uncompetitive rates, it’s important you don’t feel you have to stay with your existing bank of savings provider. Don’t be afraid to switch to a better deal - it's very straight forward and could dramatically improve your returns. Blind loyalty will simply lose you money.
10. Keep an eye on your cash - Savings rates are changing left, right and centre so unless you have secured a fixed-rate deal, it’s a good idea to keep a close eye on the interest rate you are receiving. To be alerted to the latest deals, check our money news section and sign-up to our email newsletters to keep up to date on all the latest changes in the world of finance.