The best UK savings rate depends on access needs and tax position. Easy-access: ~4.5-5.0% AER from Atom Bank, Cynergy Bank, Chase UK, Coventry BS, Trading 212. 1-year fixed: ~4.5-5.0% from Atom Bank, Hampshire Trust, Cynergy. 5-year fixed: ~4.3-4.5%. Cash ISAs run similar rates but are tax-free. All providers below are FSCS-protected to £85,000 per person.
Indicative easy-access rates (May 2026)
| Provider | AER (variable) | Notes |
|---|---|---|
| Trading 212 Cash ISA | ~5.0% | Within ISA wrapper. £20k annual cap. |
| Atom Bank Instant Saver | ~4.85% | App-only. Min £1. |
| Cynergy Bank Online Easy Access | ~4.80% | Online application. Min £1. |
| Chase UK Saver | ~3.6% | Free with current account; instant access |
| Chase UK 90-Day Notice | ~4.85% | 90 days notice; variable |
| Coventry Building Society Triple Access | ~4.4% | 3 withdrawals/yr; postal or online |
| Marcus by Goldman Sachs Online Saver | ~4.0% | Reliable rate, premium brand |
| Tesco Bank Internet Saver | ~3.5% | Established UK savings brand |
| Bank of England base rate (reference) | 4.75% | The benchmark |
Indicative fixed-rate bond rates (May 2026)
| Term | Best provider examples | Indicative AER |
|---|---|---|
| 6-month fixed | Atom Bank, Vanquis Bank, Hampshire Trust | ~4.6-4.9% |
| 1-year fixed | Atom Bank, Hampshire Trust Bank, Cynergy | ~4.7-5.0% |
| 2-year fixed | Hampshire Trust, Atom Bank, Aldermore | ~4.5-4.7% |
| 3-year fixed | Hampshire Trust, Charter Savings Bank | ~4.4-4.6% |
| 5-year fixed | UBL UK, Aldermore, Cynergy | ~4.2-4.5% |
UK fixed-rate bonds are inflation-vulnerable — locking in 5 years at 4.4% when CPI eventually rises above that means losing real purchasing power. The trade-off is rate certainty vs duration risk. Most UK savers split balances between a 1-year fixed (certainty) and easy-access (flexibility).
Cash ISA vs taxable savings — when does ISA wrapper matter?
Cash ISA interest is tax-free; non-ISA savings interest counts toward the Personal Savings Allowance (£1,000 for basic-rate, £500 for higher-rate, £0 for additional-rate taxpayers).
| Tax band | Balance at 4.5% AER before PSA exceeded |
|---|---|
| Non-taxpayer (income <£12,570) | ~£412,000 (PA + starting rate + PSA) |
| Basic-rate (£12,571 - £50,270) | ~£22,000 |
| Higher-rate (£50,271 - £125,140) | ~£11,000 |
| Additional-rate (£125,141+) | £0 — every penny taxable |
So for higher- and additional-rate taxpayers with >£11k of cash, the Cash ISA wrapper is essential to avoid tax. For basic-rate taxpayers with <£22k of cash, a normal savings account is fine — and may pay slightly higher rates than the best Cash ISA.
The savings interest tax calculator works out the exact effect of moving to a Cash ISA at any balance and band.
FSCS protection — the £85k limit per institution
Each UK bank or building society in the FSCS scheme protects your deposits up to £85,000. Above that, you should split across providers. Important: different brands can sit under the same banking licence, in which case they share one £85k limit.
Examples of shared FSCS limits:
- HSBC and First Direct = one £85k limit between them
- Lloyds, Halifax, Bank of Scotland = one £85k limit
- Santander UK and Cahoot = one £85k limit
- RBS, NatWest, Ulster Bank (Northern Ireland) = different limits (separate licences as of 2024)
The FSCS protection checker verifies which licence each provider sits under.
Common UK savings mistakes
- Leaving money in legacy accounts at 0.1%. Many UK savers have £20-50k earning 0.1% AER in old NatWest / Lloyds / Barclays current accounts. Moving to a 4.5% saver yields £900-£2,250 a year of extra interest on the same money.
- Forgetting to file Self Assessment if interest exceeds £10,000. HMRC adjusts tax codes for smaller amounts. £10k+ savings interest requires SA registration.
- Ignoring Cash ISA wrapper as higher-rate taxpayer. Above ~£11k of cash, higher-rate taxpayers lose ~£176 of interest to tax per £10k held outside ISA at 4.4% rates.
- Treating "Inflation +1%" as the goal. Inflation is roughly 2-3% in 2026. Best easy-access at 5% gives ~2-3% real return. Locking up money for 5 years at 4.3% may give 0-1% real return if inflation rises.
- Splitting unnecessarily across <£85k. One bank up to £85k is fine. Many savers waste energy spreading £30k across 3 banks.
Calculate your savings tax
The savings interest tax calculator stacks PSA, starting rate and your marginal rate. The FSCS protection checker confirms which providers share licences.
Open the savings interest tax calculator →How we built this comparison
Fee and feature data is taken directly from each provider’s published website as of 2026-05-12. UK Tax Drag has no commercial relationship with any platform listed — no affiliate links, no referral codes, no sponsored content. The methodology page documents our comparison standards. The independence page confirms our funding model.
This page is educational only and is not regulated financial advice. The choice of platform depends on your personal circumstances, investment style, and balance. Always read the provider’s key facts document and verify the latest fees before opening an account. Past performance is not a guide to future returns. Investments can fall as well as rise.
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