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Want your savings to work harder? Whether you’re putting cash aside for a deposit on a house or are building a rainy day fund, a savings account could be a reliable way to grow your money.
Lloyds is one of the main banks and building societies you’ll come across when shopping around for savings accounts. But what types of saver and ISA do they offer, and what are the interest rates like? We’ll cover everything you need to know about Lloyds savings accounts right here in this guide.
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A UK savings account is a safe place to put your money and earn interest on it, so it gradually increases in value. The interest is paid by the bank or building society providing the account, and can be at a fixed or a variable rate.
There are a few different types of savings account you can choose from to suit your needs. Your choice may depend on how much you can save, whether you can commit to a regular deposit and whether you need easy access to your money.
Some of the most popular types of savings account in the UK include:
- Easy access - these offer instant access to your money whenever you need it, with no fees or penalties for withdrawals
- Fixed-rate - these accounts offer higher interest rates if you can ‘lock away’ your money for a fixed period of time (i.e. 1-5 years)
- Notice accounts - these give you access to your money, but only if you provide a pre-agreed amount of notice (i.e. 2 months).
- Regular savers - these accounts require a regular deposit each month, up to a maximum sum.
- Cash ISAs - these accounts let you earn tax-free interest on your savings up to a certain threshold.
Why open a savings account at all? There are a number of reasons, starting with having a financial safety net. With surplus income earning interest, you can build up a nest egg for later life or just in case you lose your job.
People also open savings accounts because they’re saving towards a particular goal, such as a deposit on a property purchase or the holiday of a lifetime.
When you open a savings account and make a deposit, the bank or building society is essentially ‘hiring’ your money. They pay you interest in return, and use the money to lend to other people and businesses - or for investment purposes.
You don’t need to worry about access to your money though, as there are strict rules in place on how much banks can lend out and how much they should keep back.
Savings accounts are often a long-term product, which means that over time you may build up quite a large pot. This is why it’s good to know that UK savings accounts have protection of up to £85,000 per person as part of the government’s Financial Services Compensation Scheme (FSCS)¹. If the bank or building society goes under, your money will still be safe.
There are a lot of different Lloyds savings accounts to choose from, so we’ve broken them down into categories - instant access, tax-free ISAs and fixed term savings.
Club Lloyds Saver
A 1 year account for existing Club Lloyds current account holders, which offers higher interest for balances over £25,000 and can be opened with just £1.
Another 1 year account which can be opened with just £1, but this one’s available to new customers. However, you’ll need a Lloyds Bank account to transfer money out of the account online.
An instant access, 1 year account for existing Lloyds customers requiring a regular deposit of between £25 and £250 every month.
Club Lloyds Monthly Saver
A regular saver for Club Lloyds current account customers, offered a higher fixed rate of interest for 12 months, where you’ll make monthly deposits of £25 to £400.
Cash ISA Saver
Earn tax-free interest on your savings for a year with this instant access Cash ISA, which can be opened with just £1 and offers a higher rate of interest if you’re a Club Lloyds customer.
2 Year Fixed Rate Cash ISA
This Cash ISA offers the security of a fixed rate of interest for two years. Withdrawal charges apply and you’ll need to make an initial deposit of at least £3,000 to open this account.
Junior Cash ISA
One of Lloyd’s many savings accounts for children and young people, this Cash ISA offers tax-free interest on balances over £1 to account holders under 17 years old. It’s designed specifically for saving, so you won’t be able to touch the money until you’re 18. The maximum amount you can save is around £9,000 per tax year (until ISA limits change).
In addition to the 2 Year Fixed Rate Cash ISA above, Lloyds also offers the following fixed term savings accounts:
If you can lock your money away for two years with no withdrawals, this account for new and existing customers offers a fixed rate of interest throughout the entire period. You’ll need to make an initial deposit of at least £2,000.
Online Fixed Bond - 2 Years
This account offers the same terms as the Fixed Bond, but it is primarily managed online. However, you can have up to five Online Fixed Bond accounts open at once³, which can be useful if you’re saving for different things.
Lend a Hand Fixed Savings Account⁴
This is a savings account for people who want to help a family member get on the property ladder through the Lend a Hand Mortgage Scheme. Instead of paying a deposit, 10% of the purchase price can be moved into this account for three years as security against the mortgage.
The account also pays a fixed rate of interest, and offers £300 cashback for legal services.
Here’s an overview of the interest rates on offer with each of Lloyds’s savings accounts:
|Club Lloyds Saver||0.05% gross/AER on balances over £25,000 and 0.01% gross/AER on balances under £25,000|
|Easy Saver||0.01% gross/AER variable for 1 year|
|Monthly Saver||0.75% gross/AER fixed|
|Club Lloyds Monthly Saver||1.00% gross/AER fixed|
|Cash ISA Saver||0.01% tax free/AER variable for 1 year and 0.05% tax free/AER variable for 1 year - Club Lloyds or Wealth customers|
|2 Year Fixed Rate Cash ISA||0.20% tax free/AER fixed|
|Junior Cash ISA||1.50% tax free/AER variable|
|Fixed Bond||0.20% gross/AER fixed for 2 years|
|Online Fixed Bond - 2 Years||0.20% gross/AER fixed for 2 years|
|Lend a Hand Fixed Savings Account||1.65% gross/AER fixed|
The first thing to do is check that you’re eligible for your chosen account. For example, some Lloyds savings accounts are only available for Club Lloyds customers, and the majority are for UK residents aged 16-18+ (depending on the account)⁵.
If you fit the bill, you should be able to open most Lloyds savings accounts online. You can also call Lloyds on 0345 300 0000, use the Lloyds banking app or pop into your local branch to start your application⁶.
Sources used for this article:
- FSCS - protection
- Lloyds Bank - savings
- Lloyds Bank - online fixed bonds
- Lloyds Bank - lend a hand
- Lloyds Bank - club Lloyds saver
- Lloyds Bank - easy saver
Sources checked on 18-03-2022.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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