Where to earn inflation-beating returns
Last week Halifax, Lloyds and TSB announced that they would be cutting interest rates on some of its most popular current accounts.
It means savers face a tough challenge ensuring their money keeps pace with the rising cost of living.
Of course that challenge was difficult enough already, with the Bank of England cutting the Base Rate to 0.25% in August.
Thankfully, the Personal Savings Allowance (PSA) introduced on 6 April 2016 has given most ordinary savers a boost.
The PSA allows basic rate taxpayers to earn up to £1,000 and higher rate taxpayers to earn up to £500 in savings interest tax free. Additional rate taxpayers do not have a PSA.
The change means instant access, notice and fixed rate bonds will be a lot more lucrative, and providers will stop taxing savings interest at source.
It's also well worth looking beyond high street savings accounts to the likes of current accounts and peer-to-peer websites as the PSA applies to the interest you can earn from them as well.
Let's look at all of these and more to see what rates you can get and where the best place to put your cash is.
Instant access savings accounts
The top rate of interest on an easy access account is currently 1.15% which you can get from ICICI Bank with its SuperSaver Savings Account. You'll need £1 to open an account.
Notice accounts
If you give up access to your cash for 120 days you can get a rate of 1.51% from Al Rayan Bank, which you can open with £250.
Cash ISAs
While the PSA has effectively made all savings accounts tax-free you should still consider using your tax-free ISA allowance (currently £15,240 for 2016/17) to save.
That's because any money you put into an ISA will stay tax free, even if the interest you earn grows. With the PSA the interest you earn beyond the £1,000/£500 limit is taxed at your marginal rate.
The best rate on an easy access ISA is available with Coventry BS which offers a rate of 1.10% on deposits from only £1.
Lock your money up for a year with Al Rayan Bank and you'll get a rate of 1.35% You'll need £1,000 to open an account.
Over two years the best Cash ISA is from Bank of Cyprus UK, which is offering a rate of 1.15% on balances from £500.
Leeds BS offers the best rate over three years, paying a rate of 1.25%. It also requires that you deposit at least £100 deposit.
Finally, Metro Bank is the best over five years, offering 1.50% with a minimum deposit of £1.
Fixed rate bonds
Atom Bank offers the best one-year bond with a rate of 1.40%. It also offers the top two-year account at 1.65%. Both can be opened with a deposit of £50.
Ikano Bank is best over three years with a rate of 1.65% on deposits from £1,000.
Vanquis Bank is best over four years with a rate of 1.85% and a £1,000 deposit.
Over five years, the top pick is Paragon Bank with a rate of 1.95% and a £1,000 deposit.
Current accounts
Current accounts continue to trump all the top savings accounts at the moment, for smaller balances anyway.
TSB's Classic Plus account pays 5% on balances of up to £2,000, providing you credit the account with £500 a month. However, this rate will be falling to 3% in January 2017. There's also cashback available on contactless payments.
Nationwide's FlexDirect account pays 5% interest on balances up to £2,500 for the first 12 months. The only condition is you need to pay in at least £1,000 a month.
Lloyds Bank is offering the Club Lloyds account, which pays 4% on balances between £4,000 and £5,000, providing you credit the account with £1,500 a month and set up two direct debits from it. As with TSB, its rate will be cut from 4% to 2% in January 2017.
If you don't want to spread your money around, Santander's 123 account pays 3% (dropping to 1.5% in November) on balances of up to £20,000. You need to pay in £500 a month, and set up at least two direct debits.
There's also a £5 a month fee on the account but you can earn cashback on some of your direct debits for household bills, which can help cover that.
The Tesco Bank Current Account also pays 3%, but only up to £3,000.
And Bank of Scotland's Classic Account with Vantage pays 3% on balances of between £3,000 and £5,000 so long as you pay in £1,000 a month. You can have up to three accounts too.
Peer-to-peer
Peer-to-peer websites allow you to lend money to other people and potentially earn a greater reward for your risk.
However, your money isn't protected by the Financial Services Compensation Scheme, which is where the risk comes in.
Zopa is offering rates of 6.5% a year with its Plus account or 4.1% with its Classic account.
There's also QuidCycle Lump Sum Accounts offering rates of 6.1% over five years and 5.2% over three years.
RateSetter is offering 5.1% over five years, 2.5% over one year and 2.4% on the rolling market.
Lending Works is currently offering rates of 5.4% over five years and Landbay, which lends money to buy-to-let property landlords and is currently offering 3.79% rate with no minimum term.
Or you could look into Assetz Capital which is offering returns of 7% over three or five years with two different products.
Compare returns from peer to peer
