December’s best savings accounts paying high interest after the Budget

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Last month was an eventful one for all things money and finance - not least of all the Budget and a Bank of England meeting where a vote saw the interest rate held at 4 per cent.

However, there’s another vote just a few weeks away and the current expectation is that the Monetary Policy Committee will this time vote to cut to 3.75 per cent - meaning it’s more important than ever to make sure your cash is earning a decent rate of interest while it can.

Here’s our regular roundup of the best-paying savings accounts of different types, including cash ISAs.

Rates and products are correct at the time of writing but always check a product is right for your circumstances before opening.

Best cash ISAs

There’s been a huge battle to secure cash ISA customers this year and that’s not likely to change given the Budget revealed future limits to depositing money into cash ISAs. However, not all cash ISAs are created equally at the moment, so it’s vital you make sure you check any conditions attached to them before opening and transferring or paying in your money.

eToro currently have the highest rate we can find, at 4.66%, after opening their new cash ISA product. But there are a few things to note. Firstly, like many others, it carries a 12-month boost so the rate will drop after that considerably - so ensure you mark your calendar to switch elsewhere whenever your bonus expires on any cash ISA.

Also, to get the bonus with eToro, you’ve got to make sure you keep a minimum of £500 in the account for a full year and make sure you don’t make more than three withdrawals. If you can’t guarantee that, this might not be for you - the underlying rate is far lower. Finally, with eToro, note that the interest rate is not quite the same as with other banks, as it’s linked to a money market fund (an investment fund in low-risk assets like bonds) rather than the BoE base rate. This can change without notice.

Trading 212 is the next highest at 4.52% if you sign up using our exclusive code. The full amount includes a bonus of 0.67% which is for one year and which is for current-year contributions only; transfers in are allowed and there are unlimited withdrawals allowed. As with almost every other cash ISA, the underlying rate is variable so will go up and down with the Bank of England’s MPC votes.

Plum is next in line with 4.49%, but this is another account which you need to be sure suits your needs first - the bonus is a much larger one of 1.7 per cent, which you won’t get if you don’t meet all the conditions. The most notable of these is that you have to keep the ISA for a full 12 months with them otherwise you’ll lose that bonus interest. Also to note, Plum isn’t a bank so your money is held with Lloyds, Citibank and others - this is perfectly fine and normal, but make sure you’re within FSCS limits with them.

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Moneybox is our final pick, offering 4.47% and more simple terms - keep it with at least £500 in and a maximum of three withdrawals. The bonus rate of 0.77% lasts a year. If you need more than three withdrawals you’d be better with their Open Access Cash ISA which is 4.27% including the bonus, but offers unlimited withdrawals.

Best easy access savings accounts

Most of the easy access savings accounts are more simple: sometimes you’ll need to open a normal current account with the company to get access to the savings rate, but there’s no obligation to use it unless stated.

Chase offer 4.5% through their saver account including a 12-month bonus, and is for new customers only. You have to open the savings account within 30 days of opening the current account (which you don’t need to use but offers cashback as a perk).

Cahoot offer a ‘Simple Saver’ with 4.4% and other than a £500,000 limit that’s really all you need to know. They also offer a Sunny Day Saver at 5.00% which pays interest on balances up to £3,000 but not over that. It lasts 12 months and you have to choose interest paid monthly or yearly - can’t be changed after.

Chip offers new customers a rate of 4.37% for 12 months with three penalty-free withdrawals, or slightly lower 4.35% for instant access.

Best accounts for specific circumstances

Two additional ones to note which aren’t quite as easy-access for everybody:

Monument Bank have a 4.51% rate but the minimum opening balance is £25,000.

And while not an easy access account, if you know you won’t need cash immediately, OakNorth Bank pays 4.54% but you have to give 95 days notice to get your cash. This rate tracks above the BoE rate so if they do cut, you’ll still be on a higher rate than most.

Fixed term accounts

Finally, let’s look at the best one and two-year fixed term savings accounts on the market right now.

If you’re considering using a fixed product it’s best to move before they are taken off the market, which may be the case if the BoE rate cut becomes near-certain - and they certainly are likely to disappear afterwards. The benefit is that you get the rate guaranteed for the full term; the downside is you can’t usually access your money before the term finishes. If you get a two-year (or longer) remember the interest paid impacts your savings allowance from that year all at once.

Investec’s one-year fix offers 4.5% and you have seven days after opening it to put your money in.

Secure Trust Bank offer 4.42% for two-year fixes which mature on 5 January 2028. The minimum deposit is £1,000.

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