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Last updated:
18 September 2023
Want free money? Simply move your savings to a better interest rate. It’s usually very easy, risk-free and you’ll be quids in.
Interest rates have shot up over the last couple of years – top rates are now ten times higher than they were. Yet to get them you usually need to move your money.
Here’s how:
If you have a fixed-rate savings account or bond, you’ll usually have to wait until it matures (ends) before you can do this. Other types of account should let you move money more freely, but always double check before starting.
The top savings rate can change several times a day, with different banks competing to be the best. So it’s a good idea to regularly check if your rate is beaten elsewhere.
Even if you spot your bank as the top payer, you might still need to act.
While some banks have one interest rate for all customers, others create new ‘versions’ so only new customers (or existing customers that ask) get the higher rate.
Here’s some extra help if you’re new to savings or not sure where to start.
Three key things to check first:
1. Do you have any debt?
Borrowing usually costs more than savings will pay, so any spare money is usually better spent clearing debt. See save or pay off debt for full help.
2. Will you pay tax on savings interest?
Most people can earn a certain amount in savings interest each tax year (6 April to 5 April) without paying tax, based on your annual income.
If you earn:
Interest is counted in the tax year you can access it, which might not be the year you earned it.
This is a very simplified view, so read full information in how does tax on savings work. For example, these limits are higher if all your income is from savings interest.
You can use the Bank of England’s savings calculatorOpens in a new window to work out how much interest you’d get.
3. Do you have more than £85,000 to save?
If you do, it’s safer to spread your money across different banks. The first £85,000 per person, per banking group is protected, so you’d get your money back if a bank were to fail.
The exception is NS&I, where all of your savings are protected. The Which? savings protection checkerOpens in a new window shows which banks are covered.
Which is best will depend on what you want to do:
Pay in and withdraw money whenever
Work around restrictions to maximise the return