Interest rates remained higher in 2026 and, while that can be frustrating for homeowners looking to renew mortgages, it’s great news for savers.
Higher interest rates among banks, building societies and other finance providers means better competition and more choices for consumers.
It is important to not leave cash sat in current accounts or savings accounts earnings no or low interest, as with inflation still close to 3 per cent and likely to head higher across the year, it will erode the spending power of your cash if your interest rate is not above that.
Thankfully, many providers outside the high street names are offering interest rates well in excess of 4% right now, so if you haven’t already done so, move your money to a better place – just always remember to check the account conditions suit your needs.
Here are the highest-paying easy access savings accounts, cash ISAs and fixed-term saver options in August, with rates correct at the time of writing. All rates are AER (annual equivalent rate) for easier comparison.
Best cash ISAs in August
There’s a new market leader just now for easy access cash ISAs – which, as a reminder, are merely savings accounts you don’t pay tax on the interest in.
Sidekick have launched a 4.66 per cent account, but while like most accounts at present that rate includes a bonus, it is worth noting that the bonus is both a little larger than others and also lasts less time. The 1.43 per cent bonus lasts for six months; afterwards you therefore return to the variable 3.23 per cent rate, which wouldn’t be competitive – you’d need to mark your calendars and move money once the bonus expires, if you want to keep earning a top rate. On the plus side, this is a flexible ISA – money taken out and put back in during the same tax year doesn’t count twice against your annual allowance.
If you don’t want to switch up after six months, the usual names remain in the frame for top ISA rates, which are competitive and frequently changing by small amounts, so double-check before you open one.
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
ADVERTISEMENT
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
ADVERTISEMENT
At Hargreaves Lansdown, an ISA is now offered through Shawbrook paying 4.52 per cent, though it is worth noting HL can alter the variable rate at short notice, not just when the Bank of England moves the Bank Rate. You must open an account online, through the HL website.
With Trading 212. There, you can get 4.51 per cent including an bonus by using a code from The Independent. Again it’s a flexible ISA, the bonus lasts for 12 months and there are no fees.
And finally, Chip are offering 4.41 per cent for new customers, including a 12-month bonus. Again, it is flexible. Money in the Chip ISA is held with Lloyds, Barclays and other banks. You must open an account via the app.
Remember, all variable rates track the Bank of England’s base rate, so if that moves, so too does your overall rate, even if there’s a bonus on top.
Best easy access accounts in August
In the past couple of weeks, the UK savings market has witnessed the return of the 5 per cent accounts – and if you’re eligible for one, you might as well open one!
.jpeg)
Revolut’s 5 per cent offering has now left the market, but you can still open a Cahoot Sunny Saver which gives 5 per cent on balances up to £3,000. You can choose to have the interest paid monthly or at the end of a full year, and you can make withdrawals if you need to. Cahoot is owned by Santander.
In addition, Lemfi, a fintech initially set up to help immigrants move or send money, is also offering 5 per cent – though it only lasts for six months, then lowers to 3.04 per cent. Cash with them is held by ClearBank, an FSCS-protected and regulated bank.
Beyond those market toppers, Chase is at 4.5 per cent if you open a current account, while Tembo offers 4.55 per cent which actually gives you an additional 1 per cent bonus if you use your savings (and their mortgage service) to buy a house with.
Best fixed-term bonds in August
Fixed-term accounts, or bonds, offer a trade off: you get certainty of your rate not changing even if the BoE lowers the base rate, but in return you can’t usually access your cash until the period has finished.
For one-year fixes, OakNorth are currently offering the top rate at 4.86 per cent, while for a two-year fix it’s Tandem at 4.7 per cent which is the best rate on offer.
For longer than this, it’s possible to get 5 per cent on three- and even five-year terms, but you should consider whether investing some of your money may be better instead if you are locking it away for long periods, as investing can give better returns than just cash over the long term.
