Five tips to help you improve returns on cash

1. Check your savings rates

It’s worth checking what rate you’re currently getting on your cash savings. If you’re getting a poor rate, you don’t need to settle for it.

Most of our savings are held in instant and easy access products, where the rate is usually variable. This means it can go up but it may also have gone down since you took out the product.

Usually, the better variable rates are easy access instead of instant access. And offered by the smaller bank and building societies, instead of the high street banks. Through our Active Savings service, you can find easy access rates from a host of smaller banks and building societies.

Instant access savings accounts from high street banks and building societies typically let you instantly withdraw your money at any time. With Active Savings, withdrawals from the easy access products usually take up to one working day.

Waiting for a great rate? Sign up to our alerts and you’ll be one of the first to know when a new rate gets added to Active Savings. You can even choose which type of products you’re interested in.

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2. Watch out for bonus rates

Some banks will offer an introductory bonus rate when you sign up for a new account. This will usually be available for a set period of time, after which the bonus will end and your rate will drop.

You shouldn’t automatically disregard savings products which offer bonus rates, but you do need to treat them with caution.

Unless you know you’re going to move your money when the bonus ends, it might be worth looking at accounts which pay a slightly lower headline rate, which don’t have a bonus.

3. Get your savings in a fix

For money you don’t need to access immediately, but don’t want to invest for the longer term, fixed-term savings products could be the answer to improving your returns.

You can normally fix for anything from three months up to five years, and the longer you fix for, the higher the interest rate usually is. And you’ll get a guaranteed interest rate for the duration of the product, so it won’t change. But remember you can't usually access your money until the end of the fixed term.

Before tying up your money, we recommend having at least 3-6 months’ worth of essential expenses in an account you can access easily as an emergency fund (1-3 years in retirement).

Read more about emergency savings

4. Save tax-efficiently

The savings accounts you choose can affect the amount you’ll be taxed.

If you save outside of an ISA, the personal savings allowance (PSA) may apply. Introduced in April 2016, the PSA lets non- and basic-rate taxpayers earn up to £1,000 of interest each tax year before they pay any tax.

The PSA drops to £500 for higher-rate taxpayers and additional-rate taxpayers don’t get a PSA at all. Nonetheless the PSA means that lots of savers don’t have to worry about paying any tax on their savings interest.

Remember if you’re married or in a civil partnership you could split your savings with your spouse to effectively have a combined PSA of up to £2,000.

The personal savings allowance is calculated using rest of UK, not Scottish, income tax bands.

If your non-savings income is less than £17,570 you may be able to earn more in interest before you pay any tax on it. This is called the starting rate for savings.

Read more about tax on savings interest

A Cash ISA is a tax-efficient way of saving. Any interest you earn in a Cash ISA is not subject to UK income tax and doesn’t need to be declared on a tax return. But there are limits to how much you can add to ISAs each tax year.

Find out more about the HL Cash ISA

This information is correct for the 2024/25 tax year. Tax rules can change and benefits depend on personal circumstances.

5. Become a savvy saver by laddering your cash

Think about putting money in fixed-term products starting at different times, or with different end dates.

You’ll probably get a much better rate overall than if you left the whole amount in an instant or easy access account, and you can time your cash to come back when you think you’ll need it.

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This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.

The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 212214).