Earning as much as 7% on your savings sounds great – but what’s the catch? The top-paying accounts often come with strings attached, which could mean your money is not working as hard as you thought.

That’s important because there is a lot of cash sitting in fixed-rate savings accounts that are about to reach the end of their term. The total amount in accounts maturing between April and June is £90bn, according to the savings app Spring – and that money will need to find a new home.

On top of that, there is an estimated £329bn sitting in current accounts earning 0% interest, and another £99bn in savings accounts paying 1% or less, all of which should be doing more.

At a time when inflation is creeping up, it is crucial that your savings keep pace with the cost of living. There are some decent deals out there, but anyone about to open a new account must watch out for potential savings traps, catches and restrictions.

Irregular savings

Regular savings accounts are a great way to build a pot, and many of them have decent interest rates – but they often limit how much you can save and for how long.

The Co-operative Bank’s Regular Saver (available to the bank’s current account holders) pays a generous 7% interest, for example, but only on up to £250 a month.

Saving the maximum into this account every month – so £3,000 over 12 months – could earn you £114 interest after a year.

If that is less than you expected, the reason is that you are drip-feeding the money in over the 12 months rather than putting it all in as a lump sum at the beginning, so you are only getting 7% on the full £3,000 for one month.

If you have a decent-sized lump sum to invest, you may find that something like a high-paying fixed-rate savings account is a better bet. For example, someone with a £5,000 lump sum who put it all in a savings account paying quite a lot less – 4% – could earn close to double that amount of interest in a year: £200.

Other regular savings accounts include First Direct’s Regular Saver, paying 7% on up to £300 a month, and Zopa’s Regular Saver, paying 7.1% on up to £300 a month (the latter rate is only for six months).

James McCaffrey at the credit score app TotallyMoney says: “When it comes to savings, if it looks too good to be true, it might well be. Check the small print – headline-grabbing rates don’t always tell the full story.”

Temporary teaser rates

Some top-paying accounts include “bonus rates”, which disappear after a certain period, leaving you with a less generous rate.

The Post Office’s Online Saver, for example, offers a rate of 4.1% interest – but that is boosted by a 3.2% bonus rate for 12 months. So the interest rate without the bonus after 12 months is just 0.9%.

Similarly, Tesco Bank’s Internet Saver pays 4.12%, which includes a 12-month bonus rate of 3.07%.

Some bonus periods may be shorter, lasting only three or six months.

Savers don’t need to completely avoid such accounts, but they should make a note of when the bonus ends and then move their money.

Derek Sprawling at Spring says: “Check how long any bonus lasts, what balance it applies to, and what rate you will earn once it ends.”

Not-so-easy access

Easy access accounts are great for anyone who might need to get hold of their money quickly. But the access might not be as easy as you think.

Analysis by Spring found that 77% of easy-access accounts that come with paid-for or premium current accounts have extra restrictions.

Almost half have tiered interest rates, while nearly a third have withdrawal restrictions.

Be sure to understand the rules or you may face a penalty, such as a reduced interest rate or forfeiting the interest you have earned.

Sometimes there is a clue in the name. Mansfield building society’s Triple Access Bonus Saver pays 4.25%, which includes a 1% bonus for 12 months – but you are restricted to three withdrawals in each calendar year.

The Vida Savings Double Access Isa pays 4.16%, falling to 2.5% when more than two withdrawals are made in a year.

Aldermore Bank’s Reward Isa Single Access Account is even stricter: make more than one withdrawal a year and the rate drops from 4.11% to 2.9%.

Other accounts have eligibility criteria that restrict who can open one, says Rachel Springall at the comparison and data site Moneyfacts.

These might include needing a current account with the bank or a minimum deposit. Other accounts are open only to certain professions, such as teachers, or to people in particular regions or postcodes.

Tiered interest rates

The interest rate you get can sometimes depend on your balance. Some accounts offer a better rate the more money you have, while others pay the top rate only up to a certain amount, so those with a larger pot miss out.

The Santander Edge Saver account pays 6%, for example, but only on balances up to £4,000. Savers with this amount stashed away could earn £200 over a year. But those with more won’t earn any extra – no interest is paid on balances above £4,000 – so they would be better-off taking their additional savings elsewhere.

Similarly, Cahoot’s Sunny Day Saver pays 5% on up to £3,000 (Cahoot is part of Santander) but does not pay interest on balances over that amount.

Springall says: “It can mean you earn no interest whatsoever on higher balances.

“This is when savers need to reassess where to put their extra cash.”

On the other hand, Lloyds Bank’s Easy Saver pays 0.75% on balances from £1 up to £24,999, 0.9% between £25,000 and £99,999, and 1% on higher amounts.

Meanwhile, Kent Reliance’s Easy Access Cash Isa pays a measly 0.1% on balances below £1,000, but a decent 4.05% on savings above this.

Surprise tax bill

About 2.8 million people paid tax on their savings in 2025-26 – more than double the 1.3 million in 2022-23.

For savings outside an Isa, interest is counted as income, just like your salary. The personal savings allowance lets basic-rate taxpayers earn £1,000 interest a year tax-free; they then pay their usual 20% income tax on any extra. Higher-rate taxpayers get a £500 allowance, and additional rate payers get nothing.

The higher interest rates of the last couple of years make it easier to bust the limit. A basic-rate taxpayer would breach their allowance with £20,000 stashed in an account paying 5%, and a higher-rate taxpayer with £10,000 in the same account.

About 1.42 million basic-rate taxpayers paid an average of £641 in tax on savings interest last year, and 883,000 higher-rate taxpayers paid on average £2,030, according to Spring.

So if you are not doing so already, make use of an Isa. You can currently put up to £20,000 a year into these accounts, and all gains are tax-free.

Meanwhile, premium bonds don’t pay a set rate of interest – instead, savers are entered into a monthly draw to win prizes ranging from £25 to £1m. The odds of hitting the jackpot are incredibly slim, but all prizes are tax-free.

* Interest rates and product details correct at time of writing