Digital Banks Dominate Top Savings Rates as High Street Lenders Fall Behind

New research reveals app-based banks and digital platforms now offer far superior savings rates compared to traditional high street banks, with only one major branch-based provider currently beating inflation.

Key Findings: The Savings Rate Gap
✔ 58 instant-access accounts currently pay above inflation (3.4%) – only one is from a high street bank (Nationwide)
✔ Top rates reach 4.75% (Atom Bank) vs. under 1.5% at most traditional banks
✔ Cash ISAs: 45 of 112 beat inflation – all from digital providers
✔ Best easy-access account: Atom Bank (4.75%)
✔ Best Cash ISA: Plum (4.95%, but drops to 3.29% after 3 months)

Why Are Digital Banks Offering Better Rates?
Lower overheads (no branch networks)

Competing aggressively for customers

Focus on tech-first savings products

Top 5 Easy-Access Savings Accounts (July 2025)
Provider Account Rate (AER)
Atom Bank Instant Saver Reward 4.75%
Snoop Easy Access Savings 4.60%
Cahoot Simple Saver 4.55%
Coventry BS 4 Access Saver 4.50%
Skipton BS Bonus Saver 4.50%
Best Cash ISAs for Instant Access
💳 Plum Cash ISA – 4.95% (drops to 3.29% after 3 months)
💳 Moneybox Cash ISA – 4.65%
💳 Tembo Cash ISA – 4.64%

Watch Out for These Traps!
⚠ Introductory bonuses (rates can drop sharply)
⚠ Withdrawal restrictions (some penalise access)
⚠ Balance caps (e.g., Cahoot’s 5% rate only applies to first £3,000)

Expert Advice from Defaqto
*”If you’re earning less than 3.4%, your savings are losing value. The best deals are now almost exclusively with app-based banks – but always check the small print.”*
– Katie Brain, Defaqto Banking Expert

Why This Matters for Savers
With inflation still outpacing most high street savings rates, switching to a digital provider could be the difference between growing your money or watching it erode in real terms.

Ready to Move Your Money?
🔹 Compare top-rated digital savings accounts
🔹 Check withdrawal rules before opening
🔹 Consider Cash ISAs for tax-free interest