There are many alternatives to savings accounts, but if you prefer safety and familiarity then high interest savings accounts are very appealing.
Isas have traditionally been the first port of call for those looking to store their cash in a savings account, but according to This is Money they may not be as appealing as they used to be. The amount of tax-free interest savers can earn with Isas is famously high, however in recent times rates have fallen to such a level that they have become much less profitable. What’s more, for those saving in regular savings accounts, up to £1,000 can now be earned in interest without paying tax.
Two new schemes from the government aim to give savers a much better return on their investments. The Lifetime Isa yields an enormous 25% interest rate to those saving for a first home or for retirement. If you are using your current Isa for either of these purposes, you should almost certainly switch, as there are no other Isas which provide as much interest. The second scheme is aimed at low income earners. The Help to Save scheme will allow approximately 3.5 million people on working tax credits or universal credits to earn an extra 50% per month on anything they save. Savers will be allowed to save £50 per month into Help to Save accounts, earning a maximum of £600 extra over two years (with the option of continuing for a further two years).