19th September 2026
From regular savers to Cash ISAs, there are more choices than simply leaving money in a current account.
For anyone who has money sitting in a current account earning little or no interest, the savings market is worth another look.
The latest attention-grabber comes from Leeds Building Society, which is offering some existing members a 6.5% AER regular saver. That sounds remarkably generous at a time when many ordinary savings accounts pay considerably less.
But there is an important catch. The Leeds account is designed for people building up savings gradually. Deposits are limited to £250 a month, with a maximum of £3,000 over the 12-month term. The account is also restricted to people who meet its membership conditions.
So 6.5% does not mean that someone can simply put £20,000 into the account and earn 6.5% on the whole amount.
That illustrates one of the most important lessons about savings: look beyond the headline interest rate.
Start with the emergency fund
For someone starting to save, the first objective is usually not to chase the highest possible interest rate.
It is to build a cash reserve that can be accessed when something goes wrong.
A broken boiler, car repair, unexpected household bill or period without work can quickly turn into a financial problem if there is no money available.
An easy-access savings account can therefore be useful even if another account pays a little more but locks the money away.
For someone starting from scratch, even £25 or £50 a month is worthwhile. Regular saving can gradually turn into a useful emergency fund.
Regular savers
This is where accounts such as the Leeds Building Society 6.5% account become interesting.
Regular saver accounts are designed for people who can put money aside every month. They often offer higher interest rates than ordinary easy-access accounts, but there are normally restrictions on how much can be deposited and whether withdrawals are allowed.
The Leeds account illustrates the point neatly. Someone paying in £250 every month for a year would contribute £3,000 and, assuming the rate stayed unchanged and the conditions were met, Leeds estimates the interest at £89.38.
That is a useful return on money that is being built up gradually, but it is not the same thing as receiving 6.5% on £3,000 for a full year.
Easy access
Once someone has accumulated a larger sum, an easy-access account may be more appropriate.
These accounts allow money to be withdrawn when needed, although some have restrictions or limits.
The advantage is flexibility. The disadvantage is that the interest rate is normally variable and the best rate available today may not remain the best rate tomorrow.
This is why it can pay to check savings rates regularly rather than assuming that the account opened several years ago is still competitive.
Fixed-rate savings
For money that is unlikely to be needed for a year or more, fixed-rate savings can provide another option.
The attraction is certainty. You know the interest rate for the fixed period.
The disadvantage is that the money may be inaccessible, or withdrawals may be subject to penalties, during the term.
A higher rate is therefore not automatically better if it means losing access to money when it is needed.
What about a Cash ISA?
Cash ISAs deserve particular attention because the interest is tax-free.
For the 2026/27 tax year, an individual can put up to £20,000 into ISAs, subject to the ISA rules.
The interest earned inside a Cash ISA does not count towards the normal Personal Savings Allowance.
That becomes increasingly important as savings grow.
Outside an ISA, a basic-rate taxpayer can normally receive up to £1,000 of savings interest tax-free each tax year. For a higher-rate taxpayer the allowance is £500, while an additional-rate taxpayer has no Personal Savings Allowance.
For example, someone with £20,000 earning 5% would receive £1,000 interest over a full year.
A basic-rate taxpayer might therefore be within their Personal Savings Allowance, while a higher-rate taxpayer would have £500 of interest above the allowance potentially subject to tax.
A Cash ISA avoids that tax on the interest.
Scotland is slightly different — but not for savings
This is an area where Scottish savers sometimes get confused.
Scotland has its own Income Tax rates and bands for earnings, pensions and most other taxable income.
Savings interest is different.
The UK Government confirms that Scottish taxpayers pay the same tax as the rest of the UK on savings interest. The Personal Savings Allowance is also UK-wide.
So a saver in Wick is subject to the same savings-interest tax rules as a saver in Leeds, Cardiff or Belfast.
That makes savings accounts and Cash ISAs a relatively straightforward part of personal finance for Scottish savers.
An important change coming in 2027
There is another reason for savers to pay attention to ISAs now.
From 6 April 2027, the Government is reducing the annual cash ISA subscription limit to £12,000 for people under 65.
However, people aged 65 and over will retain the £20,000 annual cash ISA limit.
The overall ISA allowance remains £20,000, so someone under 65 could still put £20,000 into ISAs, but only £12,000 of that could normally go into a Cash ISA.
That change will be particularly relevant to people who prefer the certainty of cash rather than investing in shares.
Don't forget protection
Another question to ask when moving savings is who is holding the money.
Eligible deposits with authorised banks and building societies are protected by the Financial Services Compensation Scheme, subject to its rules and limits.
For larger sums, savers should also remember that protection is based on the banking licence and not simply on the name appearing on the front of the account.
The simple message
There is no single savings account that is right for everybody.
Someone starting with £50 a month might look at a regular saver.
Someone building an emergency fund may prefer easy access.
Someone who knows they will not need the money for a year might consider a fixed-rate account.
And someone paying tax on a substantial amount of savings interest should consider whether a Cash ISA could make sense.
The important thing is not to be distracted by a headline rate alone.
Check how much you can deposit, how easily you can withdraw the money, whether the rate is fixed or variable, whether there are conditions attached and what happens to the account when the introductory period ends.
The Leeds 6.5% account is a good example. It is an attractive rate, but the real question for a saver is not simply "What is the highest rate?"
It is "What type of savings account suits what I am trying to do with my money?"
That is a much more useful question to ask.