Unlock Higher Savings: New Interest Rate War Benefits Savers

Shawbrook Bank has put its one-year fixed rate up to 4.27 per cent and its two-year rate to 4.18 per cent — both require a minimum deposit of £1,000. Birmingham Bank also has a 4.18 per cent two-year rate on deposits over £5,000 up to £250,000. Anna Bowes from The Private Office, a financial advice firm, said: “The Marcus rate is the highest since late October so it’s likely to be snapped up pretty fast. “While there have been rate cuts across a couple of accounts, which is what we would expect to see given we’re expecting further cuts to Bank rate, you can see how competition can skew things and push other rates up.” Bank rate was historically low for more than a decade but went up 14 times between December 2021 and August 2023 to hit 5.25 per cent as the Bank of England tried to get a grip on soaring inflation. It has been cut six times since August 2024 and will fall further if inflation continues to drop. The top rate on an easy-access account is 4.5 per cent from JP Morgan’s app-based bank Chase, which includes a 2 percentage point bonus for the first year. Shawbrook Bank pays 4.13 per cent, which also contains a 2.13 percentage point bonus for the first 12 months. • The best savings accounts in 2026 — and how to choose one Easy-access rates are expected to fall if there is another Bank rate cut, which some analysts expect as soon as next month, when the Bank’s monetary policy committee next meets. This will make locking in a fixed rate now seem even more attractive. Savers who haven’t used up their £20,000 annual Isa allowance for the 2025-26 tax year and want to protect their savings from tax can also benefit from some good deals. The top one-year Isa rate is 4.2 per cent from the sharia-compliant Al Rayan Bank, available through the app Meteor Savings. It also has a 4.15 per cent for two years. Shawbrook has a 4.14 per cent one-year rate and a 4.17 per cent five-year Isa rate. Basic-rate taxpayers can earn up to £1,000 a year in interest tax-free outside an Isa, thanks to the personal savings allowance. Higher-rate taxpayers can earn £500 in interest tax-free while additional rate taxpayers get no allowance.