Savings round-up: why rates have defied expectations

It’s been an interesting year so far for savers – and much more positive than many expected. As we pass the halfway point of 2026, here’s a look at what’s happened to savings rates so far, and what we might expect going forward.

At the start of the year, the expectation was that the Bank of England base rate, and therefore savings rates, would continue to fall. At the Monetary Policy Committee (MPC) meeting in February, although the base rate remained at 3.75%, four members voted for a 0.25% cut, indicating that the rising cost of living was expected to slow further.

But then the war in Iran changed everything. At the next MPC meeting on 18th March, all nine members voted to keep the base rate at 3.75% as rising global energy and commodity prices threatened to push inflation higher.

As a result, instead of expecting further cuts, markets began pricing in future rate rises. Bad news for borrowers, but good news for savers.

And although we are expecting to see inflation increase a little going forward, at the moment inflation has actually eased slightly to 2.85%, whilst savings rates have improved. This means that there are currently plenty of inflation busting accounts. For basic-rate taxpayers, a savings account paying at least 3.56% gross should still keep pace with inflation at 2.85% after tax. It’s trickier for higher and additional-rate taxpayers, as they need gross rates of at least 4.75% and 5.18% respectively.

Easy access savings

One provider has dominated the easy access market throughout the year. The Chase Saver with Boosted Rate has paid 4.50% AER since September last year and has topped the best-buy tables for much of that time.

But it won’t be suitable for everyone. The account must be opened through the Chase app and requires an eligible Chase current account. The headline rate also includes a 2.25% bonus for the first 12 months, so it's essential to review the account once that bonus expires.

Whilst the Chase account sits at the top of our best buy table, there are some other accounts that could also be considered for those with lower balances, looking to squeeze as much as they can from their savings.  

Cahoot's Sunny Day Saver pays 5% AER on balances of up to £3,000, while Santander's Edge Saver pays 6% on up to £4,000, although it requires a fee-paying Edge Current Account, so it's important to check that the overall package represents good value.

If those accounts aren't suitable, there are still plenty of providers paying well above the rates available at the beginning of the year.

As well as the Sunny Day Saver, Cahoot is paying 4.32% on up to £500,000 on its Simple Saver account, which as the name suggests does not include a short term bonus or restricted access.  

Ulster Bank also has an unrestricted Limited Edition Saver paying 4.30% AER. Even after basic-rate tax, these accounts continue to outpace current inflation.

Of course, easy access rates can change at any time, so review your account regularly and switch if it becomes uncompetitive.

Fixed-rate bonds

Bearing in mind that base rate has remained at 3.75% since December last year, it’s extraordinary to see how much fixed term bond rates have improved across all terms.

At the time of writing the top 1-year bond is paying 4.90% with Marcus: by Goldman Sachs, compared with 4.45% at the start of the year.  

Longer-term bonds have also improved significantly. The top two and three-year bonds now pay 4.85%, up from around 4.20% at the start of the year, while the leading five-year bond has risen from 4.31% to 4.90%.

For anyone with cash they won't need in the near future, now could be a good time to lock in these higher rates. Competition has eased in recent weeks, suggesting the market may be approaching its peak.

Check out our Best Buy tables for the latest rates

Cash ISAs

Cash ISAs have continued to be popular this year, because higher interest rates have pushed more people into paying tax on their interest, as well as the significant changes announced in last year's Autumn Budget.  

From April 2027, the annual cash ISA allowance for under-65s will fall from £20,000 to £12,000. At the same time, tax on savings interest will increase by 2%, taking the rates to 22% for basic-rate taxpayers, 42% for higher-rate taxpayers and 47% for additional-rate taxpayers.

It's no surprise, then, that cash ISA balances continue to grow. Bank of England figures show that between the end of November 2025 and the end of May this year, deposits increased by £34.3 billion, compared with £24 billion during the previous six months.

The good news is that cash ISA rates have also been on the up this year, which means there are a lot of competitive, inflation busting rates available.

Easy access cash ISAs

As with the non ISA easy access best buys, there has been plenty of good news for those prepared to shop around, especially for those happy to open and manage their accounts through an app.

Many of the market-leading rates continue to come from digital savings platforms such as Moneybox, Plum and Chip.  

Although these aren't banks themselves, deposits are held with fully regulated UK banks and are protected by the Financial Services Compensation Scheme (FSCS). The important point is that protection applies to the underlying bank's licence, not the app,  

The FSCS protects up to £120,000 per person per bank licence, and this limit applies to all the cash you hold with that bank in total. That means you must add together any money you hold directly with the bank and any money you hold with it through different apps.  

Today, in our top five, the best two accounts are offered by Plum, (who deposits your funds via its partner banks CitiBank, Lloyds and QNB), and Chip whose partner banks include Barclays, Lloyds, HSBC, Qatar National Bank, Santander, National Bank of Kuwait and Nationwide Building Society. These providers are paying 4.44% and 4.42% respectively. A year ago, Plum was once again offering the best rate but that issue is paying 4.27% - so rates have improved.

Normally I would suggest moving your cash from a lower paying account, however because of the way the bonus works on the Plum ISA, if you close the account within 12 months, you will forfeit the bonus that is included in the headline rate. So, you to need make sure switching would still be the best option. This illustrates why it’s so important to always read the small print before opening any savings account.

If financial apps are not for you, there are some other competitive options. The Stafford Building Society, for example, is paying 4.36% on its Cash ISA Double Access account, although again the small print is all important. As the name suggests you can make just two penalty free easy access withdrawals a year – any more and the account will revert to the standard cash ISA which pays a lower rate.

Fixed-rate ISAs

Like fixed rate bonds, fixed term cash ISA rates have steadily increased so far this year, which means that there are many accounts comfortably outpacing inflation.  

The top 1-year ISA has improved from 4.30% in January to 4.60% today, whilst the longer term ISAs have all improved from around 4.16% to 4.66% today. And because the interest is tax free, the returns are even more valuable for many savers.

At first glance, fixed-rate bonds often appear to offer better value because of their higher headline rates. However, once tax is taken into account, cash ISAs can provide a better return for anyone who has already used their Personal Savings Allowance.

For example, at the moment the top 1-year fixed rate bond is paying 4.90% AER, whilst the top 1-year fixed rate cash ISA is paying 4.60% tax-free/AER. For those who don’t pay tax on their savings, the bond is clearly the winner as it would provide an extra £30 of gross interest for each £10,000 deposited.  

But if you are a taxpayer, you could earn more in the ISA. The rate on the bond would fall to 3.92% after basic rate tax (at 20%) has been deducted, so a basic rate taxpayer with a deposit of £20,000 would earn £920 in the cash ISA, but just £784 from the bond, if they have already used their Personal Savings Allowance.  

What’s next?

At the latest MPC meeting on 18th June, there was a majority vote of 7-2 to keep base rate at 3.75%, with two members voting to increase to 4%.  

Although energy prices and inflation have eased slightly in recent weeks, inflation is still expected to rise later this year as higher energy costs continue to pass through the economy.

Meanwhile, the increases to the top rates appear to have slowed suggesting that much of the expected movement in the base rate has already been priced into the market.  

Of course, we’ll have to wait and see, but with many of today's best savings rates sitting at their highest levels for well over a year, now could be a good time to lock away some of your cash, if you won’t need access to it.

Inertia and inflation are the true enemies of the saver – and whilst you can’t control inflation, you can make your cash work as hard as possible in order to mitigate as much as possible of the damage that it can cause.

It’s simple; shop around, ditch and then switch to put more money in your pocket.

For the latest rates, visit our Best Buy tables.

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Rates correct 08/07/2026

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions. 

The Financial Conduct Authority (FCA) does not regulate tax advice.