Regular savings accounts are one option when it comes to setting aside savings each month, although restrictions apply.
For instance, customers might only be able to pay in a certain amount each month, or be unable to access the cash until the end of the term.
Other limitations can include penalties for savers who miss a monthly payment, so it’s important to check the terms and conditions of the account.
Among cash savings accounts though, regular savings typically pay higher rates of interest. However, this interest rate will typically only apply to smaller savings pots, due to deposit limits.
first direct is currently offering seven per cent AER interest rate on its regular savings account
PA
From deposit limits to withdrawal restrictions, it’s important savers check the type of regular savings account is right for them.
Some accounts offer high-interest rates but are only open to existing members, so it’s worth checking eligibility.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, told GB News: “Saving little and often towards a specific goal or even to amass enough cash to cover three months of essential expenses is a sensible plan for consumers to consider.
“A fixed term regular savings account is a great choice and encourages the savings habit as it typically spurs savers to put some cash aside each month. Savers could then reach their savings goals quicker than expected with careful planning.”
What are the best interest rates for regular savings accounts?
For those who are simply looking for the highest interest rates on regular savings right now, money comparison website Moneyfactscompare.co.uk has ranked the options.
Nationwide Building Society has launched the Flex Regular Saver Issue 2 which pays eight per cent AER.
Savers can make up to three withdrawals from this account during the 12-month account term without impacting the interest rate.
The telephone and internet-based bank first direct comes second on the list, with the first direct Regular Saver Account.
It currently pays seven per cent AER. Savers need to deposit between £25 to £300 into the account each month, for a fixed 12-month term.
Gatehouse Bank’s Regular Saver is a one-year bond which currently offers an expected rate of seven per cent AER.
The Lloyds Bank Club Lloyds Monthly Saver comes in third place, offering 6.25 per cent AER.
Savers put in between £25 to £400 each month by one standing order or bank transfer, but they can subsequently top the monthly deposit up to the £400 limit.
Tipton & Coseley Building Society has a Fixed Rate Regular Saver until 31.10.24 which pays 6.20 per cent AER.
The NatWest Digital Regular Saver is offering a 6.17 per cent AER on savings up to £5,000.
Any savings in the account over this limit will earn a 1.41 per cent AER interest rate.
Savers can put away between £1 and £150 a month and withdraw the savings whenever they want.
Royal Bank of Scotland, which is part of the NatWest group, also offers a 6.17 per cent AER on its Digital Regular Saver.
UK interest rates have risen following the recent 14 consecutive Bank of England base rate increases
GB NEWS
Best interest rates on regular savings accounts
- Nationwide Building Society Flex Regular Saver Issue 2 – eight per cent
- first direct Regular Saver Account – seven per cent
- Gatehouse Bank Regular Saver – expected rate of seven per cent AER
- Lloyds Bank Club Lloyds Monthly Saver – 6.25 per cent
- Tipton & Coseley Building Society Fixed Rate Regular Saver until 31.10.24 – 6.20 per cent
- NatWest Digital Regular Saver – 6.17 per cent
- Royal Bank of Scotland Digital Regular Saver – 6.17 per cent
- TSB Monthly Saver – six per cent
- West Brom Building Society Fixed Rate Regular Saver (Issue 7) – six per cent
- Bank of Scotland Monthly Saver – 5.5 per cent
- Coventry Building Society Regular Saver (5) – 5.5 per cent
- Halifax Regular Saver – 5.5 per cent
- Principality Building Society 1 Year Regular Saver Bond (Issue 33) – 5.5 per cent
Skipton Building Society has launched a Member Regular Saver Issue 2 which pays 7.5 per cent, although only members can apply.
List according to Moneyfactscompare.co.uk, rates correct at the time of writing
