Full list of best savings accounts available NOW – you could earn up to 7% back
CHALLENGER banks are offering savers bumper rates as traditional high-street institutions continue to let the side down.
It comes after Coventry Building Society revealed that a whopping £256 billion of household savings are earning no interest at all.
Savers could get an extra £10billion worth of interest if they moved their money from a zero-interest account and put it into a regular saver earning 4%.
British banks have been accused of resisting passing on higher interest rates to savers in recent days.
The Bank of England's base rate is at its highest in 14 years and is currently stood at 4.25%.
But the admission that big banks are hesitant to pass on better rates to savers came in a letter from the boss of the Financial Conduct Authority earlier this week.
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Savvy savers can still get decent returns on their deposits by looking away from traditional high street banks.
Rachel Springall, finance expert at Moneyfactscompare.co.uk told The Sun that challenger banks and building societies are increasing rates faster than bigger banking groups.
She said that savers who compare the top easy access rates will find that these firms often pay 3% or more in interest.
Rachel previously told The Sun: "Challenger banks and building societies may well prioritise offering a fair deal compared to the wider market and adjust their rates to cope with demand or other market influences.
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"Building societies may also be worth considering, not just for their savings rates, but also for their principles and the support of local communities and charities."
It pays to check you're getting the best saving rate regularly as better deals are always coming onto the market.
We've compiled the best savings rates available right now across all major account types below.
Easy access savings accounts - up to 3.55%
These savings accounts do what they say on the tin - they usually allow unlimited cash withdrawals.
However, this perk means they tend to come with lower returns, but there are a number of accounts worth considering.
Chip's instant savings account offers customers 3.55% back in interest and unlimited cash withdrawals as long as they invest £1.
Those saving £1,000 in the account could expect to gain £35.50 in interest after 12 months.
HSBC's Online Bonus Saver pays customers 3.5% back on savings between £1 and £10,000.
However, if you do make a withdrawal you'll be paid a maximum of 1.3% back in that month.
Any savings above £10,000 will earn a lower rate of 2%.
App-only bank Tandem pays savers 3.5% back on deposits between £1 and £250,000.
Notice savings accounts - up to 4.05%
Notice accounts offer slightly higher rates than easy-access accounts.
But you'll need to give advance notice to your bank (up to 180 days in some cases) before you can make a withdrawal or you'll forfeit the interest.
Oxbury Bank's Personal 180 day notice account pays savers 4.05% back on deposits between £1,000 and £500,000.
Savers depositing £1,000 in this account can expect to gain £40.50 in interest after 12 months.
Oxbury Bank also offers a 120 and 90 day notice account which the former paying 3.9% back and the latter paying 3.8%.
Fixed bond savings accounts - up to 4.7%
These offer some of the highest interest rates - but this comes at the cost of being unable to withdraw your cash within the agreed term.
If interest rates increase during your term you can't move your money and switch to a better account.
Some providers do all withdrawals but you'll be charged a hefty exit fee and will likely have to forfeit any interest gained.
OakNorth Bank's one-year fixed term savings account pays savers 4.6% back on deposits between £1 and £500,000.
If you were to save £1,000 in the fixed bond over 12 months you'd expect to gain £46 in interest payments.
If you are comfortable with locking some of your cash away for two years then you could get 4.7% back on a minimum £1,000 deposit with Investec's two-year fixed deposit by Raisin UK.
Regular savings accounts - up to 7%
These accounts generate decent returns but only on the basis that you pay in a set amount each month.
To get the best rates you'll also need to hold a current account with the providers below as these linked regular savings accounts pay the top rates.
First Direct offers a regular saver paying 7% in interest.
You'll need to save between £25 and £300 a month, and up to £3,600 a year.
For example, if you were to save £300 every month for 12 months with this account, you'll earn approximately £136.50 in interest.
Lloyds Bank's Club Lloyds Monthly Saver will pay 6.25% interest on savings of up to £400 a month, so if you're looking to put away a little here and there it could be a good account for you.
For example, if you deposit £400 every month for 12 months you will have a balance of £4950 after all interest is paid - but you'll need to be a Club Lloyds member to have access to this account.
How can I find the best savings rates?
With your current rates in mind, don't waste time looking at individual banking sites to compare rates - it'll take you an eternity.
Research websites like MoneyFacts and price comparison websites such as Compare the Market, Go Compare and MoneySupermarket will help save you time and show you the best rates available.
These sites let you tailor your searches to an account type that suits you.
It's also worth considering opening an Individual savings account (Isa).
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These can pay high interest but come with high withdrawal fees and are unlikely to be beneficial if you've less than £65,000 in savings.
However, Lifetime Isas are great for anyone aged 18-39 hoping to buy a house or save for retirement.