The best cash ISAs and savings accounts in March before Bank of England vote on interest rates

One serious downside of the war in Iran – the awful personal costs aside – has been more expensive mortgages in the UK.

Worries about squeezed oil supply and that might do to inflation has seen lenders ratchet up costs, with fixed-rate two year home loans well above 5%.

However, the other side of the see-saw to higher mortgages is there has also been a reasonable boost in savings rates, at least among the best players.

With inflation still running at around 3% and not likely to come down to targeted 2% levels until later in the year or beyond, it remains important for savers to ensure their cash is in an account earning them a good amount of interest, thereby avoiding losing out on buying power over the long term as inflation takes its effect.

Here is our regular roundup of the best savings deals; rates are correct at the time of writing but always ensure an account is right for your circumstances beyond the headline rate, including any bonus periods, withdrawal allowances and more.

Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk said:

“Many of the top rates outpace inflation by over 1%, meaning a high-paying savings account can significantly boost savers’ real returns while it remains above its target. When savers are deciding which account is best, it’s important they balance flexibility against certainty. Easy-access accounts suit those who may need to withdraw cash at a short notice, while fixed rate deals offer guaranteed returns.”

Best cash ISAs

An ISA is simply a tax-free version of a normal saving account, you won’t pay tax on any interest earned no matter the amount.

It’s a very simple three-way battle right now for the best rate in cash ISA terms; your preference will be dictated by which bonus you may have already used and when you think you might need to withdraw any money in future.

Prosper does a good deal for new members who get a market-leading 4.7% AER variable tracker rate for the first 12 months. This includes a 1.92% AER Boost, paid to your nominated bank account after 12 months or on account closure.

Trading 212’s 3.6% offering isn’t the very highest – but when you use an exclusive code from The Independent, the 4.68% it gives you is the market leader right now. You can make as many withdrawals as you need, with the bonus being valid for one year. Transfers in are not eligible for the bonus.

Tembo customers who save with a Lifetime ISA (LISA) and use Tembo’s free Mortgage service will receive a 1% bonus of their LISA value towards their home purchase. The easy access cash ISA pays a nice 4.55%.

In addition, customers will also benefit from access to fee-free mortgage advice.

Finally, Plum have upped their rate to 4.66% to remain very competitive – but you need to ensure the terms of this meet your likely needs – you won’t get the full rate until a bonus is paid at the end of 12 months, by which time you still need the account to be open and not have transferred your ISA elsewhere. Otherwise you get a far lower 2.54%, which is also the rate after the first year.

Beyond that, DF Capital offers the best one-year deal at 4.35%. A host of others including Tesco Bank, Moneybox and Hargreaves Lansdown offer rates at over 4% so make sure your cash is somewhere that offers a competitive amount ahead of the ISA deadline.

Best easy access savings accounts

If you need a home for savings beyond the tax-free ISAs, perhaps because you have maxed your limits or because you want some accessible rainy-day money, an easy access account is what you want.

Cahoot at 5%, Dudley Building Society at 4.25% and DF Capital at 4.2% all offer good deals at present. But the catch is they don’t pay a bonus.

Easy access accounts that do pay a bonus include one from Chase at 4.5% and one from Mansfield Building Society at 4.25%.

You do need to open a current account to get the Chase deal, though you don’t actually have to use it if you prefer not to.

Best fixed-term saver accounts

Over one year, there are a few good deals. Union Bank of India (UK) is offering 4.23%. To open this account, you can start saving with £1,000 and deposit a maximum of £1m. Interest is paid annually when your account matures. You can open the saver in branch or by post.

With Close Brothers Savings, you can save between £10,000 and £2 million per account, but note that only £120,000 of the sum will be protected under the FSCS. The account can be opened online, but you can also manage it via post or over the phone.

The best two year deals come from Castle Trust Bank at 4.23% and Tandem Bank at 4.21%.

Best children’s accounts

The best deals for children all come from former building society Halifax and other societies that are still going.

Halifax is paying 5.5% for a 12 month bond, with a minimum of just £10 on the table. Nationwide pays 5% and you only need £1 to start an account. Kent Reliance at 4.18% and Saffron at 4.1% also offer decent deals.