‘Best’ joint savings accounts for first time buyers with interest up to 5.85%

With more Britons jointly saving to buy their first home, savers are being urged to check they’re investing in the accounts with the best returns. At present, joint savers can currently benefit from interest rates as high as 5.85 percent.

House prices fell by 5.3 percent in August compared with the same month last year, reflecting the biggest annual drop since 2009, according to Nationwide. While this is a sizeable fall from the record-high levels seen last year, getting on the ladder remains a daunting task for first-time buyers.

Average house prices are still hitting £259,153 in the UK And when paired with the UK’s stubborn 6.9 percent inflation rate, building up a deposit is harder than ever.

Despite the challenges, new figures from money.co.uk savings accounts indicate millions of young people are banding together in an effort to ease the burden.

Nearly half (47 percent) of people aged 18-24 have a joint savings account with their partners, family members, or friends, according to the data, while around a quarter (23 percent) of young people are actively saving for a home.

READ MORE: House prices fall by 5.3 percent in a year – the biggest fall since 2009

With this in mind, a savings expert has explained how to get “excellent” rates and “maximum savings potential” during the current period of high inflation eroding money’s purchasing power.

Lucinda O’Brien, expert at money.co.uk, said: “Saving together through a joint savings account has a wealth of benefits, and they’re not just related to your savings potential. For starters, it promotes shared financial responsibility and a sense of teamwork, which is key when it comes to long-term goals.”

Ms O’Brien added that funds can also accumulate “much more quickly” with multiple contributors, while joint savings accounts offer competitive interest rates that enable money to grow at a faster rate and “enhance” savings potential.

However, Ms O’Brien said: “Deciding what type of joint savings account is right for you depends on your personal circumstances, and how quickly you may need to access your funds.”

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For those at the beginning of a long-term savings journey and financially secure enough to know that they won’t need to dip into savings, Ms O’Brien said: “You can get excellent rates and maximum savings potential with a fixed rate bond. 

“The Ford Money Fixed Saver One Year offers a competitive 5.95 percent interest rate, which is great for your long-term savings, but with no access to withdrawals for a year.” 

Similarly, the My Community Bank One Year Fixed Term Deposit offers a 5.95 percent interest rate, with a 12-month term.

Ms O’Brien said: “If you want to save but might need immediate access to your funds – either to move quickly to secure a purchase or for other, unrelated emergencies – then an instant access account is the one for you.”

According to the savings expert, the Ford Money Flexible Saver account is currently “one of the best available options”, with a rate of 4.75 percent.

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Meanwhile, the Aldermore Double Access Account provides savers with a marginally lower 4.7 percent rate.

Ms O’Brien added: “Remember that joint accounts aren’t the only option when saving for your first home, with lifetime ISAs (LISAs) providing a 25 percent bonus to your savings up to £1,000 a year, the top choice for many.”

There are certain rules to follow to qualify for the bonus. Firstly, people must be UK residents to open and continue to pay into a Lifetime ISA, unless they’re a crown servant (for example, in the diplomatic service), or their spouse or civil partner.

The property must also cost £450,000 or less and it must be bought at least 12 months after the first payment into the LISA is made. People must also use a conveyancer or solicitor to act for them in the purchase – the ISA provider will pay the funds directly to them. People must also be buying with a mortgage.

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