As the Bank of England increased the base rate in late 2021 from a record low of 0.1 percent to 0.25 percent, savers should be hopeful that interest rates may also rise so it’s best to look around for the best deals. On the Andy Clever Cash YouTube channel, personal finance expert Andy Webb discussed the best savings accounts in the UK for 2022 to help savers understand the different options available.
The easy access account that is “paying the highest interest” on cash is the Virgin Money M Plus Current Account.
People are only able to earn interest on the first £1,000 they deposit into the account and the rate available is 2.02 percent.
It may not sound amazing but “compared to everything else, that’s the best you’re going to get,” Andy said.
Inflation is at 5.1 percent, something likely to continue throughout the year, meaning there is a big gap between the interest rate offered and the rate of inflation, but the personal finance expert said “it is still well worth getting the highest rate you can”.
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Mr Webb explained the Virgin Money’s 2.02 percent offering is a current account so it is likely that people will have to take part in a credit check before they can open one up.
“Maybe stay clear if you have a big credit application coming up this year, something like a mortgage, maybe stay clear but if not, there is no harm,” he said.
If people have £1,000 or a lump sum, they can put it in the account and make £20.20 in interest by the end of the year.
He said: “it’s not a huge amount of money but it makes a difference. A decent amount of money so it’s well worth getting it.”
Mr Webb continued: “It’s slightly better than Virgin Money in lots of ways, however it is only available on Apple IOS.
“As a way to tempt you in, they are giving two percent on £3,000 savings.
“It’s a variable account so rates can change over time, or they could introduce a fee for the app, but as of now people can put £3,000 in and get £60 at the end of the year.”
The third account that Andy would consider is the Club Lloyds Current Account.
The rate “drops dramatically” between the top two accounts and this third option, he explained, as they offer interest at 0.6 percent on the first £4,000 saved.
If people have another £1,000 saved after this, and they can get an extra 1.5 percent on the extra grand.
If they deposit £5,000 all together, the interest rate given will be at an average of 0.78 percent.
Mr Webb said: “That is much much higher than you will get at the best easy access accounts elsewhere.”
He added: “Another reason this is my third pick is because you get some freebies with it.
“Six cinema tickets, 12 movie rentals or a magazine subscription for a year. That in itself is worth more than you get if you’ve got a tiny bit more interest in a different account.”