The economic headwinds that have been buffeting the chancellor, Rachel Reeves, might be a headache for her, but they have brought positive news for some of those looking for a better deal on their savings.

We have heard a lot recently about turmoil in the bond markets and higher UK government borrowing costs – but they are also pushing up the interest you can earn on some fixed-rate savings accounts.

Meanwhile, strong competition between providers means you can currently get instant- and easy-access accounts that pay up to 5%.

With the 31 January self-assessment tax return deadline looming, lots of people are going through their paperwork and reviewing the state of their finances.

So if your money is languishing in a savings account paying a rubbish return, now is the time to switch to a better-paying one.

Fixed-rate savings bonds

These offer some of the highest rates. You typically have to tie up your money for between six months and five years, and they provide a clear, guaranteed return in these tricky times.

However, some people do not have the luxury of being able to lock their cash away, while others would prefer to keep it easily accessible.

The good news is that the economic factors currently at play have pushed up the top rates on some these accounts, says Anna Bowes, a personal finance expert at the financial advisory firm The Private Office.

“For the first time in 18 months, a five-year bond is paying more than the top one-year bond – great news for savers looking to lock in higher returns,” she adds.

At the start of this month, the top-paying five-year bond was paying about 4.5%, but at the time of writing this had climbed to 4.8%. Meanwhile, the highest-paying one-year fixed bond was paying 4.77%.

Normally, you would expect to be able to earn a higher rate by opting for a longer term, but that all changed in 2023 when interest rates peaked during the summer and were expected to start falling again, which they eventually did.

This latest shift suggests the markets expect interest rates to stay higher for longer, says Bowes, adding: “But how long will it last? If you’re ready to tie up some of your cash, now could be the perfect time.”

Last Thursday, the top-paying five-year fixed bond, with a rate of 4.8%, was being offered by JN Bank UK (part of the Jamaica National Group). The minimum opening balance is £100. Other decent payers over five years include Close Brothers Savings and Shawbrook Bank (both at 4.52%) and Atom Bank (4.5%).

This year, the Bank of England is expected to cut the base rate from its current level of 4.75% when policymakers next meet on 6 February, with one more cut seemingly nailed on, and some economists think we could see a third later in the year. It all means a longer-term fixed bond “could become more desirable”, says Rachel Springall, finance expert at financial data provider Moneyfacts.

But if you would prefer a shorter term, on Thursday there were six-month fixed-rate bonds available paying up to 4.7%.

However, getting the very best rate often means going with a smaller or less well known name. Providers offering six-month bonds paying 4.7% included Raisin UK and Zenith Bank UK.

Instant or easy-access accounts

With cost of living pressures still raging, many savers will be keen to keep their cash close at hand where they can get at it if needed.

The average easy-access account interest rate has been on a bit of a rollercoaster ride over the last couple of years: it was just 1.56% in January 2023 and had climbed to 3.15% by last January. But last year’s two Bank of England base rate cuts have helped bring that down to 2.92% (the average on Thursday last week).

But the good news is that the top-paying easy-access accounts are offering quite a bit more than that.

Chase UK (the British retail arm of US bank JP Morgan) has one ­available to new customers called Chase Saver. It currently pays 5%, though that rate is boosted by a 1.5% interest bonus that lasts for six months (the account’s standard rate is 3.5%).

This is a sector where banks are competing heavily, and last week Revolut – the fast-growing fintech which claims to have more than 10 million British customers – upped its instant-access savings rates. It means those who hold Revolut’s free standard account have seen their rate rise from 2.29% to 4%.

Meanwhile, Plus and Premium account holders (these cost £3.99 and £7.99 a month respectively) have had their rates upped to 4% and 4.25%. Those signed up to Revolut’s Ultra plan will enjoy a 5% rate – but that account costs £540 a year.

Revolut is not yet a fully fledged bank – that looks set to happen later this year – so for the time being, money in its instant-access savings accounts is held with a partner bank, ClearBank. That means, for now, customers’ savings of up to £85,000 are protected by the official Financial Services Compensation Scheme (FSCS) via ClearBank.

The savings and investment app Chip has also boosted its instant-access account rate, paying 4.7%. Similar to Chase, that offer is for new customers and is boosted by a 0.95% interest bonus lasting for six months – the current standard rate is 3.75%.

Chip is not a bank, and so, again, ClearBank provides its savings accounts, which means you get the FSCS protection up to £85,000.

Cash Isas

As they fill in their self-assessment tax return this month, many more people will be finding themselves in a position where they have to pay some tax on their savings because they have breached their personal savings allowance.

However, you do not pay tax on interest on money held in an Isa. So if you are not using your Isa allowance, or only using some of it, now is the time to act. In the current tax year, the most you can save in Isas is £20,000.

Top-paying easy-access cash Isas at the time of writing included those offered by the Plum and Moneybox apps (5.06% and 5% respectively – however, both of these are boosted by an interest bonus). Meanwhile, you can currently earn up to 4.55% with a fixed-rate cash Isa.

Springall says banks and building societies are likely to make efforts to entice savers with better deals on fixed-rate Isas in the weeks ahead, but any rate war would typically be seen in March and early April.

“Therefore, some savers may feel inclined to adopt a wait-and-see approach until nearer the new tax year,” she adds.