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Best regular savings accounts: Today’s latest rates
If you can only put away a little at a time, you might want to consider this financial product
A regular savings account requires you to commit to paying in a certain amount of money each month, usually between £10 and £500. In return, the bank gives you a higher interest rate than you would normally get with other types of accounts.
Regular savers are usually fixed-term accounts which last for a year.
In this guide, Telegraph money will cover:
- How we determine the best rates
- The best regular savings accounts
- Expert opinion: Things to consider when choosing a regular savings account
- FAQs
How we determine the best rates
The Best Buy tables show the best savings rates widely available in the market. This means certain accounts are excluded, including those that require minimum deposits of more than £25,000 or are available only to local or existing customers.
The data in these tables is provided by Savings Data Limited and is compiled using automated tracker tools and updates from savings providers. Savings Data Limited then manually checks the information and enters it into a database that feeds the live tables, which update daily.
The savings accounts shown are protected by the Financial Services Compensation Scheme. The information in this article is intended for information purposes and should not be taken as endorsement or advice.
The best regular savings account
Use the table below to discover the best regular savings accounts for you.
For other savings options that allow you to access your money, see our guides to the best easy-access savings accounts, along with the best notice accounts and best current accounts.
You might be able to find higher rates by locking your cash away – don’t miss our guide to the best fixed-rate bonds.
Plus, don’t miss our guide to the best cash Isas, which shows the top options for easy-access, notice, regular and fixed-rates – where your savings interest is all tax-free.
Expert opinion: Things to consider when choosing a regular savings account
Mark Hicks, of investment and savings platform Hargreaves Lansdown, said: “Regular savers can have a very catchy headline rate. But quite often, the maximum amount of money you can deposit is low. Banks may attract you in with a high interest rate and then you realise you can save £5,000.”
“They are very good if you want to deposit small amounts of money and if you’re new to saving,” he added.
And Caitlyn Eastell, of Moneyfactscompare.co.uk said: “Regular savings accounts are an ideal choice for those wanting to receive a higher rate of interest or wish to develop and maintain a regular savings habit.
“However, many regular savings accounts don’t give much flexibility on the amount that can be deposited each month and often have minimum or maximum monthly payments.”
FAQs
Can you open more than one regular savings account?
Yes, you can open more than one account. Regular savers are for making smaller payments, so there is nothing stopping you from opening several to earn more interest on your money.
How many payments do I have to make?
Some accounts will have a minimum number of monthly payments – often 10 or 11.
Are my savings protected?
Yes, regular savings accounts are protected. As long as your account is with a UK-regulated bank or building society, the money is protected under the Financial Services Compensation Scheme up to £85,000 per institution.
Can I open a regular savings account for my children?
You can open an account for your children. For instance, if you have a child aged 17 or under, you can open a fixed account for a year paying 5.8pc AER with the Saffron BS Children’s Regular Saver. You can save between £5 and £100 a month. For children aged 15 and under, there is also the Halifax Kids Monthly Saver, which you can contribute between £10 and £100 to each month.
Is a regular savings account worth it?
It takes time to build up the amount of money you have in the account because you can only make small deposits.
It is also worth bearing in mind that the interest you get will be less than the headline rate. This is how it works when the money is saved monthly, rather than one lump sum.
Why would anyone use a regular savings account?
A regular savings account can help develop good saving habits. If you are only able to put a small amount of money away each month and would prefer a short-term arrangement, then it might be the best situation for you.
What are the pros and cons of a regular savings account?
A regular savings account gives you considerably better interest rates than standard accounts, rewarding you for making frequent savings over a year or so.
However, there are generally rigid terms and conditions. The amount you can save is capped and your interest rate might be reduced if you don’t save every month or if you need to make a withdrawal. Many accounts don’t allow early withdrawals whatsoever.
You usually need to have another product with the same bank – usually a current account.
The rate generally lasts for a year, meaning your money is moved to an account with lower interest rates at the end of the term.
Some accounts have variable interest rates – meaning the provider can change the rates whenever they want – so it’s important to keep an eye on messages from the provider and switch, if the rates drop too low.
Any tax due on interest you earn over the personal savings allowance is generally calculated by the bank. Rachel Springall, of Moneyfactscompare.co.uk, said: “Banks will notify HMRC [HM Revenue & Customs] of the annual interest received and consumers’ records will be updated based on this. Consumers can contact HMRC by telephone or in writing before this is done. Any charges will be notified by way of a calculation and tax code change.”
“There are many savers out there who have been vocal to not want their tax code changed, so they would need to pay HMRC a lump sum, and thus it may be beneficial for them to proactively contact HMRC with their details,” she added.