Interest rates are up again – which is good news for savers, though not so good for people with a mortgage or loan. The Bank of England has now raised the Bank Rate ten times in a row, increasing it from the negligible 0.1 per cent two years ago to the latest rate of 4 per cent. Some banks have joined the party and slightly raised the rates paid to savers. But it’s more important than ever to make sure your savings are earning the most they can: the average rate paid is less than half the “best buy” rates.



If you may need the money soon or at short notice then a variable-rate savings account can pay 3 per cent a year, though check the conditions as some penalise you for taking money out, or if the total left in falls below a threshold. You might get a smidge extra by agreeing to give notice – anything from 95 to 120 days before you want your money.


Fixed-rate bonds tie up your money for one to five years. The best pay around 4.3 per cent for a two-year fixed rate and only a fraction more for five years. That premium over instant access is worthwhile if you are saving long-term, or for a house deposit, for example.

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National Savings and Investments has issued its first one-year bond for many years. The Guaranteed Growth Bond pays 4 per cent. It is completely safe, and you can put in up to a million pounds (if you have that much), which makes it pretty much a best buy for the best-off. Premium bonds have also improved slightly in the few weeks since I last wrote about them. From February they pay 3.15 per cent overall, though the actual rate taking into account just the prizes you are most likely to win – £25, £50, and £100 – is a shade over 2.5 per cent. But it is easy-access and prizes are tax-free. So if you pay tax and have used up your tax-free savings allowance, they are a best buy especially for higher-rate taxpayers and people who can afford to buy the maximum £50,000.

Rates change daily, so you can check the latest best buys at


QUESTIONS? Send any questions to Paul cannot answer you personally, but will reflect them in his column.