Best savings accounts for 2025

Regardless of the reason for putting money aside – for a house, a holiday, or as a safety net to cover unexpected expenses – you'll want to ensure your money is earning you the maximum return.

Looking for a credit account with a more competitive interest rate can make a substantial difference.

Punjab National Bank is paying among the lowest interest rates, with its savings account offering a return of 0.75 per cent. A saver with £50,000 in this account can expect to earn around £376.29 per year in interest. Shifting the deposit to the best buy easy access account from Atom Bank, which pays 4.85 per cent, would generate a yearly earnings of £2,479.64, a difference of £2,103.35.

To assist you in maximising the effectiveness of your savings, The Telegraph has compiled a list of the top available rates currently on offer for bonds, savings accounts, Isas and current accounts, utilising market analysis by Moneyfacts.

In this piece, we will be discussing:

• The best fixed-rate bonds
• The UK's top variable savings account interest rates
• There are a few current accounts that offer better interest rates than others, but the rate you can receive may depend on your individual circumstances, including whether you have other accounts with the same bank.
• The best Isa rates
• Choosing the right type of account

What is a savings account?

Unlike a current account, which you'll use to pay your bills and for every day spending, a savings account is designed to be the place where you can put your spare money aside, where it will hopefully increase over time.

There are several different types of savings accounts – some offer variable rates, which can alter at any point in time, while others necessitate you to commit to keeping your money locked away for a fixed period.

In theory, the more troublesome an account may be, the more interest you should earn – but that is not always the situation.

The top fixed-rate bonds for 2025

Fixed-rate bonds tend to offer the highest interest rates available, but at present, several types of variable accounts, such as the best easy-access savings accounts, can often match or even surpass these rates.

People saving cash need to think about whether to lock into a fixed-rate deal to earn a set interest for a longer period, or take a risk on a variable-rate and hope the interest doesn't suddenly drop significantly.

We have evaluated the top bond accounts across different fixed-term durations:

One-year fixed rate

Vida Savings 1 Year Fixed Rate Savings Account – 4.77pc

To open the account, you need to pay a minimum deposit of £100. You can decide whether interest is paid monthly or annually.

Two-year fixed rate

Tandem Bank 2 Year Fixed Rate Account – 4.65%

Opening an account requires just £1 to be deposited. Interest is paid each year on the anniversary of the account's opening.

Five-year fixed rate

SmartSave 5 Year Fixed Rate Savings Account – 4.5%

You must save at least £10,000 in this account. Interest will be paid on maturity.

The highest variable savings account rates for 2025

Variable-rate accounts generally offer more flexibility than fixed-rate ones; typically, you can make as many withdrawals as you like without being penalised on interest, but certain deals have their own limitations.

In general, easy access accounts let you withdraw cash whenever you like; regular saver accounts require you to make regular deposits; notice accounts allow you to make withdrawals, but only if you give your provider a set amount of notice beforehand.

Easy-access savings account

Chase Saver with a boosted rate account – 5%

For new customers with a Chase current account, it's possible to get 5pc interest for six months with the bank's Chase Saver with a boosted rate account. You must open this within the first 31 days of opening a Chase account, and you will get a 1.5pc bonus on top of the standard interest rate - for now, that’s 5pc.

For an account without a bonus rate, the highest return is afforded by Atom Bank, paying 4.85 per cent.

You can open an account with just £1. If you don't withdraw any money from the account, you'll receive the advertised rate. However, if you take cash out, the rate will decrease to 3.25pc for that month.

Principality Building Society's Regular Saver Account – 8pc returns.

This account has a six-month term and can be opened with just £1. You can pay in up to £200 a month, and there are no withdrawals allowed before the term ends. The interest is paid when the term comes to an end.

Notice savings account

Bank of London and the Middle East 90-Day Notice Account - 4.94% net savings interest rate

A minimum deposit of £10,000 is required. You must provide 90 days' notice prior to making a withdrawal or closing your account. Interest is paid quarterly.

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In some cases, current accounts will give you interest on the balance of money they hold, which can be useful if you don't want the bother of transferring money between multiple accounts.

We've discovered that Nationwide's current account has the best interest rate available at the moment:

Nationwide FlexDirect Current Account – 5%

Interest is paid on balances of up to £1,500, and this is only for the first 12 months. Moreover, you need to deposit at least £1,000 a month into the account.

The best Individual Savings Account (ISA) rates for the year 2025

It functions much like savings accounts, but with the advantage of tax-free interest plus a cap of £20,000 per tax year on deposits.

Easy-access cash Isa

Moneybox Cash Isa - 5%

Savers can open this account with £500, and interest is paid on the anniversary of account opening every year.

One-year fixed rate

Shawbrook Bank 1-Year Fixed Rate Cash ISA - 4.53%

The account requires a deposit of £1,000 to be initially set up. Interest is paid when the bond matures.

Two-year fixed rate

Hodge Bank 2-Year Fixed-Rate Cash ISA – 4.43 per cent

The minimum deposit required is one thousand pounds. Interest is paid each year on the account's anniversary.

Three-year fixed rate

Hodge Bank 3-Year Fixed-Rate Cash ISA - 4.37%

An account may be opened with an initial deposit of one thousand pounds. Interest is paid on a yearly basis, coinciding with the account's anniversary date.

What is happening to interest rates on savings?

Hundreds of savings accounts currently offer a rate greater than the CPI inflation rate, which increased to 2.6% in November, up from 2.3% in October, according to the latest data from the Office for National Statistics.

Savings rates have been steadily falling since the Bank Rate reached its peak of 5.25pc last summer, and the latest cut to bring it down to 4.75pc in November is accelerating the decline.

So, if you're after a high-paying account, you'll need to move quickly because the top ones rarely stick around for long.

Alice Haine, from online investment platform Bestinvest by Evelyn Partners, comments: “At the moment, the most competitive savings rates continue to be ahead of inflation, resulting in individuals who have secured the best offers earning a healthy return on their savings. Holding onto a top rate now before the best deals vanish could be a reasonable approach for those with cash sitting in an account providing disappointing returns, to guarantee their money is working efficiently.”

Get an idea of how much interest your savings account is earning each year, and potentially earn more by switching to a different account.

What's the difference between an Individual Savings Account (ISA), a bond, a savings account, and a current account?

A current account is a type of bank account that usually earns no interest, but provides you with many options in regards to how often you withdraw your funds.

When you place your money in a savings account, the bank typically rewards you by paying interest, but it often puts certain limits on the number of withdrawals you can make.

A fixed-rate bond is a savings account that runs for a set period, usually between one and five years. Until the term ends, you can't take out the money, but if you agree to keep it locked in, you can often expect a higher interest rate.

The key difference between an Individual Savings Account (Isa) and other savings accounts lies in the fact that no tax is levied on the interest earned. On an Isa, it is possible to save up to £20,000 per year in a tax-free manner.

Choosing the Right Account for You

The first thing to consider is whether you might need to tap into the funds in an unexpected situation. A current account or an easily accessible savings account will provide you with this degree of flexibility.

However, you'll get a higher rate if you're willing to put aside your funds for a certain length of time (for example, by placing a bond). Normally, the longer the timeframe, the higher the rate - although this is not currently the case. Fixed-rate accounts with one and two-year terms are significantly higher than those with five-year rates.

The other thing to consider is whether you're at risk of going over your personal savings allowance. This amounts to £1,000 for a basic-rate taxpayer and £500 for a higher-rate taxpayer. If you earn more than this in interest outside of an Individual Savings Account, you'll have to pay income tax.

To figure out whether you could exceed your Individual Savings Account (ISA) limit, and whether you might need an ISA.

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