Building societies launch higher-rate branch-based savings accounts

Building societies have launched a range of branch-based accounts with better rates than most high street banks.

High street savings accounts have taken a hit during the pandemic, with most offering a meagre 0.01% interest. Despite historically low rates across the board, a number of building society savings accounts have overtaken their high-street bank competitors, giving savers the opportunity to capitalise on higher interest and shield their assets better against rising inflation.

Some of these new savings accounts are branch-based, meaning they don’t offer the same convenience as a readily available online account, and there also are limitations on the number of times you can take money out each year before paying a fee. Nevertheless, those who prefer to run their finances in-branch rather than online - and who are looking to access the best rates on the market - may find that the new building society savings accounts suit their needs.

We've rounded up the building society accounts with the best rates, and some of the best online alternatives if a limited access arrangement isn't for you.

The best building society savings accounts in the UK

If you’re looking to access some of the UK’s leading savings rates, a building society account may be the right option for you - so long as you can keep withdrawals to a minimum.

Coventry Building Society - 0.50%

Coventry Building Society’s new Limited Access Saver (4) - available through branch, post and telephone - pays 0.50% interest on £1 or more. This is significantly higher than the 0.01% many high street banks are shelling out, but there is a downside: it limits you to taking money to 6 times per year. If you need to make further withdrawals, you’ll have to pay a fee equivalent to 50 days’ of interest on the cash you take out - around 70p for each £1,000.

Leeds Building Society - 0.50%

Leeds Building Society’s Double Access Cash ISA, available via branch and post, also offers a market-leading 0.50% interest. Unlike Coventry’s Limited Access Saver, however, the Double Access Cash ISA requires a minimum opening balance of £5,000. You can only withdraw funds twice per year or you’ll pay the equivalent of 30 days’ interest - or 41p for every extra £1,000 withdrawn - and if your balance falls below £5,000 your rate would drop to just 0.05%.

Nationwide Building Society - 0.45%

Nationwide’s One Year Triple Access Saver - one of the few available online - offers 0.45% interest for those who can afford the minimum £1,000 deposit. However, after 12 months, your money will be moved into a lower-paying account. The society does have two branch-based accounts, but they are not open to new savers, and pay comparatively poor rates. Its Limited Access Saver pays 0.05%, as long as you make no more than 5 withdrawals, but any more and the rate drops to just 0.01%. Its Triple Access Saver pays 0.1% if you limit your withdrawals to three a year, but also drops to 0.01% if you make more.

The best online savings accounts in the UK

If you’re committed to online banking but want to get the best interest possible, some digital banks are still offering competitive rates, although there may also be terms and conditions attached to securing the best rate.

Marcus: by Goldman Sachs - 0.50%

Marcus’s savings account also pays 0.50%, but has no withdrawal restrictions on £1 or more, meaning those that prefer the ease of online banking may find this digital account suits them best. However, it only raised its rate from 0.4% last month by adding on a 0.1% bonus payable for 12 months, so savers could see their rates dwindle if they stick with Marcus for more than a year. Plus, the 0.50% is only automatically available to new savers, so those who already have a Marcus account will have to claim the bonus manually.

Charter Savings Bank - 0.50%

Charter Savings Bank’s Easy Access Issue 21 account, which can be managed online or by post, also pays 0.50% interest. However, the minimum deposit to open an account is £5,000, so may not be suitable for those that do not already have a large amount of savings. Also, ​​if your balance falls below £5,000, your interest rate reduces to just 0.10% so you’d have to make sure your savings consistently stay above this threshold.

Cynergy Bank - 0.50%

Cynergy Bank’s Online Easy Access Account (Issue 40) is also offering a competitive 0.50% interest with a minimum deposit of £1. However, after 12 months its interest reverts to the underlying variable rate, which is currently 0.30% variable. Therefore, this could be a great option for those with a limited budget for a deposit, but bear in mind that the 0.50% interest won’t last for long and you would probably end up with a less-than-stellar rate after a year.

More savings advice

To keep up to date with the Bank of England’s interest rate policy, check out Damien’s article “When will interest rates rise (or in fact be cut)? – Latest predictions”. For a weekly round-up of the best savings rates on the market, bookmark our easy access and regular savings best buy tables, or browse our list of the best savings apps in the UK.