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The five top #savings deals: how to make the most of your cash.

champagneIt’s been a long time since savers had anything to be happy about. Last week’s increase in base rate may hardly be a reason to crack out the party poppers – it was only 0.25% after all – but at least it’s heading in the right way for savers (although mortgage borrowers will be less happy).

But of course, it’s not simple: if you’ve got a savings account don’t assume you will now get 0.25% more interest. It’s up to the bank or building society how much you get. Now is a good time to find the best home for your savings. You might be able to get higher rates, but if you go for one of these, we don’t think you’ll go far wrong.

1. Best fixed deal: Atom Bank 1.95% on £50 minimum fixed for one year. This app-based bank has just put up rates on new fixed rates. Even if interest rates do go up over the next 12 months it seems unlikely you’ll be out of the money on this deal.
2. Best variable rate deal: BM Savings Internet Savings Account 1.3% on minimum £1. You must make a note to watch the rate as after a year your money goes into a much lower paying account. BM Savings is part of Lloyds Banking Group so you know your money is with a UK owned bank.
3. Best cash Isa: Coventry Building Society Easy Access Isa 6 paying (from 1 December) 1.3% on £1. Coventry is putting all its rates up by the full 0.25 – making this currently a good deal. As it is a variable rate deal, you can transfer your Isa whenever you like – you aren’t tied in.
4. Best alternative use of a current account: Nationwide FlexDirect pays 5% on the first £2,500 of cash. The rate is fixed for a year. BUT you need to pay in at least £1,000 a month. And you only get interest on £2,500: so a maximum of £125 in a year.
5. Best Junior Isa deal: Take your pick from Nationwide or Coventry building societies, both paying 3.25% on a minimum £1. If Halifax or Tesco follow suit and pass on the 0.25%, then they too will be paying 3.25%.

And one for (cautious) gamblers.. The prize fund rate on NS&I Premium Bonds is going up by 0.25 to 1.4% from December. This means the chance of a single bond winning a prize (which range from £25 to £1 million) goes up from 30,000 to one to 24,500 to one. That still means the chance of winning is remote – but slightly less so than before. And you can always get the money back you’ve got in Premium Bonds whenever you like.

See our guide to savings here

And our guide to children's savings here

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Sunday, 09 December 2018