Finally, a 5.25% regular saver we can ALL access
SAVERS who put aside money each month are often rewarded with interest rates of up to 8 pc, and tend to get better deals than those depositing a lump sum.
Several High Street banks and building societies offer so-called regular saver accounts that pay top rates on deposits of up to £500 a month.
But there is often a catch. Most are offered only to savers who have their current account with the provider. Withdrawals are typically restricted, too.
Last week, Aldermore Bank broke the mould by launching its Regular Saver, which pays 5.25 pc on deposits of up to £300 a month to new and existing customers alike.
The account also lets you make withdrawals whenever you like without penalty — just like the most flexible of easyaccess accounts.
Savers who put the full £300 a month into this account for a year would have saved £3,600 after 12 months, plus £102.27 in interest.
Anyone with higher balances can benefit from regular saver accounts by drip-feeding their nest eggs into multiple of these accounts to enjoy the generous interest.
Tipton Building Society pays 6.2 pc on its Regular Saver — higher than Aldermore Bank’s version, which runs until October 31, 2024. However, you can’t make any withdrawals during the term.
The account is available at its branches and savers can deposit a maximum of £250 a month.
Other top rates on regular savings accounts can only be accessed by current account customers of each provider. Nationwide current account holders, for example, can earn 8 pc on its Flex Regular Saver. You can save between £1 and £200 a month into the account.
The building society is offering a £ 200 switching reward to anyone opening its online current account and closing their existing current account.
If you put away £200 a month for a year you would earn £104 in interest on top of the £2,400 saved. The same £2,400 left in the society’s Instant Access Saver at 2.25 pc would earn just £54 in interest.
The account runs for a year during which you can make up to three withdrawals. If you make any more, your rate will drop to 2.15 pc.
First Direct current account holders can earn 7 pc on savings of between £ 25 and £ 300 a month.
The full £300 a month will give you £3,600 plus £136.50 interest after 12 months. The £3,600 left for a year in its Savings Account at its current rate of 2 pc will earn only £72.
The bank forbids any withdrawals. You can close the account during the 12-month term, but you will only earn 2 pc and not the headline 7 pc rate.
Lloyds pays 6.25 pc on monthly savings of between £25 and £400 over a year and NATWEST 6.17 pc on its Digital Saver on up to £150 a month.
TSB Monthly Saver pays 6 pc on between £25 and £250 a month. All three allow you to make withdrawals at any time.
Yorkshire Building Society pays 7 pc on its Loyalty Regular Saver, but this is open only to those who have been members of the society for at least 12 months. You can open an account online, through its branches or by post.
It allows you to put in a maximum of £500 a month and earn £227 interest on the maximum £6,000 going into the account. You can only make withdrawals on one day in the year.
Once you have been saving for a year, ensure your cash ends up in a decent account. Some move you to easy-access accounts which can pay as little as 1.4 pc.