Despite the measly interest rates currently being offered on many deposit accounts, don’t let it put you off saving money on a regular basis, as it will always be a smart move and will stand you in good stead for years to come.
Even if you were getting no interest, saving regularly will soon help you build up a decent savings nest egg and make you less reliant on expensive overdrafts and credit cards.
The hardest part for many people who want to put some money aside is actually getting started – it’s just too easy to put it off and find something else to spend it on.
Many of us have good intentions to save some of our wages at the end of the month, but by the time we get there it’s often been spent elsewhere.
One of the best ways to overcome this issue is to set up a standing order so that your money is switched to your savings account the day after you get paid, that way it won’t be sitting around in your current account tempting you to spend it.
A Regular Savings account is a great vehicle for this – it offers higher interest returns are than everyday standard savings products, in some cases two or three times higher, although be aware the terms and conditions can be quite strict.
For example, some Regular Saver accounts don’t allow any withdrawals during the 12 month term of the account and with others you must make a payment every month to qualify for the headline interest rate.
Some people may find the restrictive terms and conditions a little off-putting, but for others it helps to instill the financial discipline they sometimes need to stick to a regular savings routine.
Although not much help for those looking for a home for a lump sum, Regular Savings Accounts offer some of the highest savings rates on the market.
As you’ll see from the table below the best regular savings accounts are offered by banks as a loyalty sweetener to their current account customers.
Once you get into the habit and have built a savings pot, it gives you more savings options – for example you could choose to put your lump sum into a fixed rate bond or a cash ISA while you take out a new regular saver for the following year.
Regular Savings Best Buys
|Provider||Account||Current Account Required?||Interest Rate AER||Minimum pay in per month||Maximum pay in per month||Are withdrawals permitted?||Interest (Gross) after 1 year based on max savings permitted|
|Nationwide B S||Flex Regular Online||Yes||5%||£1||£250||Yes||£81.25|
|First Direct||Regular Saver||Yes||5%||£25||£300||No||£97.50|
|M&S Bank||Monthly Saver||Yes||5%||£25||£250||No||£81.25|
|Lloyds Bank||Club Lloyds Monthly Saver||Yes||3%||£25||£400||Yes||£77.65|
|Lloyds Bank||Monthly Saver||Yes||2.5%||£25||£250||Yes||£40.47|
|Saffron Building Society||Fixed Rate Regular Saver||No||3.5%||£10||£200||Yes||£45.26|
|Virgin Money||Regular Saver (13)||No||3%||£1||£250||Yes||£48.53|
|Kent Reliance||1 Year Regular Savings||No||3%||£1||£500||Yes||£97.06|
Information correct as at 16th October 2018
- Mainstream credit card rates unchanged in 2020 – for now - June 16, 2020
- Best Buy Fixed Rate Savings – 22nd May - May 22, 2020
- Best Cash ISA products for the new tax year – updated 13th May - May 13, 2020