Low interest rates: 7 ways to find better rates for savings

Young plant growing from coin jar

Savings rates aren't doing incredibly well right now, but you can still do well if you're savvy about how you save.

We've got a few tips to help you boost that savings pot.

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Shop around

It might sound obvious but shopping around is still the best way to make a little extra return on your savings. For example, at the moment HSBC is the UK's biggest bank in terms of how much money it holds in accounts, but its best savings rate for a two-year fix is just 0.65%.

Check the best buy tables and you'll find the best rate on a two-year fixed rate bond is 2.11%, paid by Al Rayan Bank. On £5,000 that amounts to a £150 difference over two years.

Don't be scared of the unknown

These days a lot of the best savings rates are offered by banks you may not have heard of such as Al Rayan, BLME, Vanquis and Shawbrook. These are either challenger banks who are fairly new to the market or small banks that are offering tempting rates in an attempt to grow.

If a bank is a member of the Financial Service Compensation Scheme, that is a good sign it is reputable. It is that means your money – up to a limit of £85,000 – is protected in the event the bank goes bust.

Many of the top-paying accounts are also now offered by Sharia banks. These are banks that work according to Islamic rules, which prohibit the payment of interest in return for lending or accepting money.

This means money you give them doesn't earn interest instead it is invested in Sharia-compliant activities to generate a profit that is shared between you and the bank.

Check if loyalty pays

When you are looking for a savings account, check if your current account provider offers any special rates to existing customers. Some, including First Direct and Nationwide, offer higher rates to loyal customers so you could find you get a better deal this way.

For example, First Direct has an exclusive regular saver that pays 5%, but is only available to their current account holders.

Take a look at app-based banks

The newest banks are only available via apps on your phone, but due to their low overheads are offering some stonking savings rates. For example, Atom Bank regularly tops the best buy tables with its savings accounts paying up to 2.4% at present.

If you are looking for a home for a relatively small amount it could be your best option as it is the only bank in the top tables for fixed-rate accounts at the moment that allows minimum deposits of £50.

Drip feed for bigger rewards

If you only have a small amount to save, take a look at regular savings accounts. These offer big interest rates but limit you to only paying in relatively small amounts each month. This can be a hugely rewarding way to build up a nest egg.

For example, First Direct, Marks & Spencer Bank and Nationwide all offer their current account customers regular savings accounts paying 5% interest.

The best regular saver not linked to a current account is from Saffron Building Society and pays 3.5%.

Look beyond savings accounts

The best interest rates on offer at the moment are not on savings accounts, several current accounts offer far more. Nationwide's FlexDirect account pays 5% on up to £2,500 for 12 months and Tesco Bank pays 3% interest on balances up to £3,000.

To get the interest you have to meet minimum monthly funding requirements and set up direct debits but it could well be worth the hassle.

Move around

Banks are eager to grab new current account customers so regularly offer cash rewards if you switch to them. Move around regularly and the amount you'll earn will easily eclipse the interest your savings are earning.

For example, Halifax currently is offering £125 if you switch to the Reward Current Account or Ultimate Reward Current Account (offer ends 31 July); First Direct is paying £100 on its 1st Account; and M&S Bank is offering a £185 gift card when you switch and stay on the M&S Current Account and the M&S Premium Current Account for 12 months.

Vintage money-saving tips
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Vintage money-saving tips
Back then there was no choice, because the mass-produced microwaveable meal was just a glint in a marketing guru's eye, but now, cooking from scratch can save substantial sums.
The older generation learned that there were meat-free days of the week to save money, and that if you had meat you''d stretch mince with breadcrumbs, or buy cheaper joints and use every scrap.
Perfect fruit and vegetables and top-of-the-range brands are a new phenomenon. Buy generic non-branded food and fruit and vegetables in whatever size and shape is most affordable

Nowadays we rush around the supermarket grabbing things we like the look of - with little idea of what we're going to do with it. Making a list and thinking about what you buy can save you thousands of pounds over the course of a year.

There's no such thing as 'left-overs' there's just the ingredients for tomorrow's dinner. The remains of the meat can be stir-fried the next day, the vegetables blended into  soup, and the potatoes saved for bubble and squeak.

Try an experiment and eliminate everything from your life with the word disposable in the title. Not only will you save money, but your bin will take far longer to fill too.

Before you bin anything, think twice about whether you can give it a second life. Think carefully, does your granny have her tried and tested tips that she has a habit of mentioning, for instance, washing out freezer bags? If you mock, you're missing a trick and wasting money and resources.
Cutting out draughts and insulating your home properly can cut 10% off your heating bill.
Back in the 1940s when no-one had central heating, people got used to wearing another layer at home. Try lowering your thermostat gradually, and only stop when those around you start to notice - you'll be surprised how much you can save.
If you save your washing and dish washing until you have a full load every time you'll save energy and save money.
Over the generations we have been sucked into believing the hype. In the days when adverts were few-and-far between, we managed without many of the things we consider essential nowadays. Re-consider what you buy, and why. Without advertising, would you buy any of it?
It's always cheaper to save in advance and plan a purchase than to rush in and borrow - which could end up costing you hundreds of pounds more in interest.
Older generations typically withdraw what they can afford to spend in cash and then leave their debit card at home or deep in their wallets. This has the advantage that they don't tend to reach for a debit or credit card and spend more than they can afford.
Because the older generations couldn't borrow their way out of trouble, they tended to plan more. Give your family a financial safety and a nest egg for the future.
Back when there were only a finite number of items of clothing to go around in a neighbourhood, people borrowed from each other for special occasions. Nowadays swapping and sharing can save substantial sums
Back in the 1940s when no-one had central heating, people got used to wearing another layer at home. Try lowering your thermostat gradually, and only stop when those around you start to notice - you'll be surprised how much you can save.
There was a time not so long ago when no-one could actually remember anyone who had actually bought a bike. They were passed through the siblings, then across family and friends networks, so that decades later, children were still learning to ride a bike for free. Of course it helps if you buy something gender-neutral, then you can hand it down, and reap the benefits as others hand expensive toys on to you.
In previous generations, neighbours would think nothing of asking each other to babysit, walk their dog, or to borrow a ladder. Nowadays we pay handsomely for babysitters and dog walkers, and each have an expensive ladder gathering dust in the shed.
The army of people who come to our homes to do odd jobs is a new phenomenon for all but the very wealthy. You may well have the skills required to complete these jobs, so get stuck in.

Ditch going out for dinner or browsing round the shops for taking a walk, visiting the beach with a picnic, or holding a family DVD night.

Nowadays we're constantly striving for a bigger TV, a flashier car and a better kitchen. Generations ago people never considered that they would ever be able to afford bigger, flashier and better, so they got on with the business of enjoying what they had.

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