Interest on savings accounts are improving at pace following 14 consecutive Bank of England base rate rises (now at 5.25%) since December 2021.

In fact, the best paying accounts now beat inflation, which stood at 6.8% in the year to July 2023, meaning your money will be gaining value in real terms, a situation we haven’t seen for several years.

Currently, savers can get 6.10% AER on a fixed rate deal, but it means tying up your cash for two years with Recognise Bank.

But there are other ways to beat this rate and earn up to 7.5% interest on your cash without having to lock it up for years…

Earn 7.5% with Skipton Building Society

The Skipton Building Society Member Regular Saver (Issue 2) pays 7.5% gross/AER on a minimum £1 and maximum of £3,000 a year.

It’s for existing customers who held a savings or mortgage account with it on or before 31 May 2023. It can be opened online, over the phone, by post or in branch.

The maximum you can deposit each calendar month is £250, though there’s no minimum monthly subscription amount or limit on the number of times you can deposit cash. Any unused allowance can be rolled up into the future months which refreshes on the 1st.

Based on £250 deposited each month with no withdrawals, you would have a total balance of £3,161 at maturity.

Santander Edge Saver paying 7%

Santander is now paying 7% AER on its linked easy access Edge Saver on balances up to £4,000. This is split between an underlying rate of 4.5% AER (4.41% gross variable) and a bonus rate of 2.5% AER (2.47% gross variable) for the first 12 months of the account being opened.

To be eligible you need to have or open a Santander Edge current account which costs £3 a month but allows customers to earn up to £20 a month in cashback on essential spending and household bills.

Earn 7% with First Direct

The First Direct Regular Saver offers 7% AER/gross to customers with a First Direct 1st Account. For new, non-First Direct customers who want the rate, you can open a 1st Account and then open a Regular Saver, bagging £175 for the switch in the process. Both new and existing customers must apply for the account online.

Account holders can save between £25 and £300 a month and you have to keep the money in the account for a year without withdrawals. The 7% interest will be paid in a lump sum after 12 months and based on a £300 contribution each month over the year, you’ll earn £136.50 interest (gross).

Earn 6.25% with the Club Lloyds Monthly Saver

The Club Lloyds Monthly Saver pays 6.25% AER for those depositing between £25 and £400 each month (it needs to land in your account before the 25th of the month), and allows you to withdraw your cash without penalty. It’s only for customers with a Club Lloyds current account. The saver account can be opened and managed online, by phone, via app and in branch.

The interest will be paid at the end of the 12-month period. Based on a £400 deposit every month for 12 months, you will have a balance of £4,950 after interest is paid. Upon maturity, cash is moved to its Standard Saver which currently pays between 1.10% gross/AER variable and 1.8% gross/AER variable depending on your balance.

Do note that the Club Lloyds current account has a £3 monthly fee, though it is waived each month you pay in £2,000 or more.

Other Lloyds current accounts (Platinum, Club Lloyds Platinum, Silver and Club Lloyds Silver) come with a monthly fee between £10 and £21, on top of the £3 a month Club Lloyds fee if you don’t pay in the minimum.

Earn 6.17% with NatWest or Royal Bank of Scotland

NatWest and RBS (part of the NatWest group) both offer a Digital Regular Saver to their respective current account customers. NatWest won at the YourMoney.com Awards 2022 in the category of Best Everyday Current Account Provider.

The accounts pay 6.17% AER /6% gross (variable) interest on balances up to £5,000. Balances above this earn 1.41% / 1.40% AER/gross.

You can pay up to £150 via a standing order or ad-hoc payments into the account each calendar month.

Based on £150 deposited each month over a year, you would earn £59.83 in interest.

However, you can also set up debit card round-ups to be transferred to this account and they don’t count towards your monthly £150 limit – so it’s possible to stash away a lot more than £150 a month.

NatWest and RBS are currently running ‘Double Round Ups’ which allow customers to double the amount that is rounded up and transferred to savings accounts. For example, if you make a payment of £4.50 in a shop, with Double Round Ups, instead of 50p being transferred, it will transfer £1 to your savings account.

To quickly build your savings balance, use your NatWest or RBS debit card for all your everyday card purchases and where possible, try to split transactions.

NatWest Group is also offering new and some existing customers £200 to switch your current account to them.

Halifax Regular Saver pays 5.5%

The Halifax Regular Saver pays 5.5% AER/gross on deposits between £25 and £250 a month (12-month term) and you don’t need to hold a current account with the bank to get this deal.

It can be opened online, via app, in branch and by phone. You can make a bank transfer to top up your savings and the amount you save each month can vary, just as long as the total amount of your deposits does not exceed the monthly limit of £250. The money also needs to reach your account by the 25th of each month.

If you deposit £250 every month, the balance after 12 months will be £3,082.50.

An Everyday Saver account will also be opened as part of the application. You will need to keep this account open so that Halifax can transfer your savings into it when your Regular Saver comes to the end of its term. Currently it offers up to 1.65% gross/AER variable interest, depending on your balance.

Nationwide Start to Save 2 account pays 5.5% interest

The Nationwide Start to Save 2 pays 5.5% for new and existing customers. It allows deposits of up to £50 each calendar month over a two-year period. Based on depositing £25 a month over the two-year period, savers would have an estimated balance of £633.26.

Savers are also entered into a prize draw offering £250 when meeting certain criteria.

Barclays Rainy Day Saver Account pays 5.12%

Barclays Blue Rewards customers (£5 a month fee but rewards earned on direct debits, mortgage, insurance, Barclays loans etc) can apply for the instant access Rainy Day Saver.

It pays 5.12% AER/5% gross on balances up to £5,000 and 1% AER/gross on balances above £5,000.

However, Barclays said customers won’t receive a monthly cash reward to Blue Rewards Wallet for having a Rainy Day Saver account. Existing monthly Blue Rewards aren’t affected and it will keep paying them into your Blue Rewards wallet.

Earn 5% on your savings with HSBC

The HSBC 12-month fixed rate Regular Saver account pays 5% AER and applies on savings between £25 and £250 per month, with a lump sum being paid at the end of the term.

If your regular payments are less than £250 a month, you can carry forward your allowance, paying more in later months (up to a total of £3,000). However, withdrawals within the term aren’t allowed. But you can choose to close your account early, where you’ll receive interest at the Flexible Saver rate (2% AER).

In total for accounts of £3,000 after 12 months, you would earn £81.25 in interest.

Earn 5% on your savings with Chase

Chase by JPMorgan attracted 1.6 million customers in the first 20 months since launch in September 2021. It offers 5% on round-ups – but there’s no option to add other money to the account too, as there is with NatWest and RBS.

With the Chase current account, you can choose to round-up your debit card spending to the nearest £1, where Chase will autosave the difference for you and apply 5% interest.

For example, say you made a debit card purchase for £10.60; Chase will round up the spend to £11, with the 40p added to your round-up account so you earn 5% on this 40p.

Chase will calculate your interest daily and pay it monthly. You can access and spend the money whenever you like – but if you leave it in the round-up account it will continue to earn 5% interest.

After a year, Chase will automatically transfer your round-up balance to your Chase current account, and you can start saving all over again.

Debit card round-ups are the only way to add money to the round-up account – you can’t move money to the account any other way.

Earn 5% in-credit interest with Nationwide Building Society

The Nationwide FlexDirect current account offers savers 5% AER (4.89% gross) in-credit interest.

It is available on up to £1,500 for the first 12 months, no interest is earned above this amount. After 12 months, the account pays 1% AER (0.99% gross) variable.

FlexDirect can be opened online or in branch and customers will need to pay in £1,000 per month which doesn’t include transfers from other Nationwide accounts or Visa credits.

TSB Monthly Saver pays 5% AER

TSB has increased the rate on its Monthly Saver to 5% gross/AER, fixed for 12 months for those with its current account. You can save between £25 and £250 each month (only one payment allowed each month). There are no penalties for withdrawals but you can’t top up any withdrawn amounts.

Based on a £250 a month deposit, you would earn £71.31 at the end of the year.

Tandem easy account account pays 5% AER

The Tandem Instant Access Saver pays 5% AER (4.89% gross) on your cash and you don’t need to pay in regular sums or even hold a current account (it doesn’t offer current accounts anyway).

As it’s a digital challenger, you need to download the free Tandem app to open the account. There is no minimum balance to open an account but the maximum balance is £250,000.

This account has an underlying rate of 4.65% – but you can opt-in to a 0.35% ‘top up’, bringing the total interest paid to 5% AER. To get this, customers simply need to open the Tandem app and press the ‘top up’ button. The top up rate applies to a customer’s account for 12 months from the date of application.

Fixed rate bonds

If you are happy to tie your money up for longer, fixed rate bonds offer better interest rates than easy access savings accounts.

The best rate on a one-year bond is 6.01% AER from SmartSave. It requires an opening balance of at least £10,000 and can be opened online.

Savers can also earn 6.10% AER on the best buy two-year bond from Recognise Bank (minimum £1,000 deposit). The best rate on a three-year bond is also from Recognise and stands at 6.05%.

The top-paying four-year deal pays 5.85% via Hampshire Trust Bank (£1 deposit required). Meanwhile savers can get 5.8% AER on a five-year bond from RCI Bank with a £1,000 deposit.