Fixed savings rates climb to 5.2% – these are the best buys if you’re happy to lock your money away

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Fixed savings rates have breached the 5 per cent barrier as a host of banks and building societies boost accounts.

Investec Save is offering the best-buy one-year fix, paying 5 per cent – you need to deposit a minimum of £5,000 to open the account.

Two and three-year fixes are slightly higher, with the best rates being 5.03 per cent and 5.15 per cent respectively, offered by GB Bank and West Brom Building Society.

And those who want to lock their money away for longer to guarantee a strong rate can get 5.2 per cent. 

This is offered by West Brom Building Society over five years, and the minimum deposit is £1.

On the easy-access front, Spring is still offering 5 per cent variable on balances between £10 and £5,000 through its Accelerate Saver – although it says this is for a limited time only.

With inflation revealed to hit 3.1 per cent in August, it is important to have your savings tucked away in rates that beat this. 

These are not tax-free accounts, so the interest you earn above your personal savings allowance is taxable.

The best rate on a tax-free cash Isa is offered by West Brom Building Society, matching its taxable account with a rate of 5.2 per cent over five years.

When was the last time you checked the rate your money is getting?

The Bank of England has estimated that around £300billion is idling in current and savings accounts earning absolutely no interest, according to rates scrutineer Moneyfacts. 

Even if this was shifted into accounts paying just 4 per cent interest – which is more than achievable, as our top picks below show – UK savers would generate £12billion in interest. 

‘Ideally, savers need to aim for a return of 4 per cent on a fully flexible easy access account that allows unlimited withdrawals to move cash to and from a current account as and when it’s needed,’ said Rachel Springall, finance expert at Moneyfacts. 

> Read more: The best easy-access savings accounts to earn at least 4 per cent interest 

High-street names secretly offering top rates

The last few months have been a strong period for savings rates, with both bigger banks and smaller names getting in on the action.

In July, Investec launched a three-year fixed saver offering 5 per cent, which according to the bank’s analysis was the first three-year account to hit that level in more than two years.

And in August we revealed the ‘secret’ savings accounts from big banks offering triple the interest – but you won’t find them in-branch or on their own websites.

NatWest launched one such account in August called First Active, paying 4.5 per cent including a fixed 1.5 per cent bonus. Since then this has plummeted to 4.05 per cent.

When it comes to cash Isas, both NatWest and Nationwide are two high-street names leading the pack.

NatWest is offering strong one and two-year fixed rate Isas, paying 4.72 per cent and 4.75 per cent respectively.

Meanwhile, Nationwide is a good choice for three and five-year fixes, paying 4.65 per cent and 4.7 per cent.

You can get better rates if you’re prepared to save with less well-known providers, with Vida Savings offering the best-buy one and two-year Isa accounts at 4.8 per cent and 4.9 per cent.