A savings account pays you interest for keeping money with a bank, building society or credit union. The accounts differ in two ways that matter: how quickly you can get your money out, and whether the rate is fixed. This page sets out the types, what each pays on average now, and the tax and protection rules that apply to all of them.
The types of savings account
| Type | Access | Rate | Suits |
|---|---|---|---|
| Easy access | Withdraw any time (some limit how many withdrawals a year) | Variable | An emergency fund, money you may need soon |
| Notice | Give the account’s notice period before each withdrawal | Variable | Money you won’t need at short notice |
| Fixed rate bond | Locked in for a term, such as 1, 2 or 3 years | Fixed | Money you’re sure you won’t need for the term |
| Regular saver | Monthly deposits up to a limit, for a set term | Fixed or variable | Building savings from monthly income |
| Children’s account | In the child’s name; a parent usually runs it | Variable or fixed | Saving for a child |
A cash ISA comes in the same forms (easy access, notice, fixed), with the interest tax-free: see the ISA guides. Premium Bonds pay prizes instead of interest: see Premium Bonds and NS&I.
What savings pay now
Each month the Bank of England publishes the average rates UK banks and building societies quote on savings accounts. These were the averages for August 2026:
| Account | Average rate |
|---|---|
| Instant access | 2.07% |
| Cash ISA (variable rate) | 2.01% |
| 1-year fixed rate bond | 4.04% |
| 2-year fixed rate bond | 4.24% |
| 3-year fixed rate bond | 4.37% |
| 1-year fixed rate cash ISA | 4.40% |
An average is a benchmark, not the best you can get: the best accounts pay well above it, and many older accounts pay less. How to find the best savings account explains how to compare. Bank Rate was 3.75% and CPI inflation 3.1% in August 2026; how interest rates affect savings explains how the two affect what you earn.
Tax on the interest
Each tax year a basic rate taxpayer can earn £1,000 of savings interest tax-free, a higher rate taxpayer £500 and an additional rate taxpayer nothing; your band is worked out with your interest added to your other income. If your other income is low you may also get the starting rate for savings. Banks pay interest without taking tax off, and HMRC collects any tax due, usually through your tax code. Work out your own position with the savings interest tax calculator.
Protection if a bank fails
The Financial Services Compensation Scheme (FSCS) protects money in UK-authorised banks, building societies and credit unions up to £120,000 per person, per bank. Several brands can belong to one bank and share one limit, so check before you spread money across them: see FSCS protection and, for more than the limit, where to put a large sum.
Savings account guides
| Guide | What it covers |
|---|---|
| How to find the best savings account | Average rates by account type, what counts as a good rate, and how to compare and switch |
| Easy access savings | How they work, bonus rates and withdrawal limits |
| Fixed rate bonds | Rates by term, early access, and fixed against easy access |
| Notice accounts | How notice periods work and when they suit |
| Regular savers | What a regular saver really earns, and the conditions attached |
| Saving for a child | Children’s accounts, Junior ISAs, and tax on a child’s interest |
| Where to put a large sum | FSCS limits, splitting across banks, and NS&I |
| Personal Savings Allowance | How much interest is tax-free, and when a cash ISA helps |
| Savings interest tax calculator | The tax on your interest, from your income |
| Compound interest calculator | What your savings grow to, or how long to reach a target |
| What is AER? | AER, gross rates and how to compare them |
| How interest rates affect savings | Bank Rate, savings rates and inflation |
| Switching savings accounts | Moving savings, including ISA transfers |
| FSCS protection | The limit, shared licences and temporary high balances |
| Emergency fund | How much to keep and where |
| Help to Save | The government bonus for people on Universal Credit |
| Money market funds | A cash-like investment, and how it differs from savings |
For ISAs, Premium Bonds and saving by age, return to Savings.