Cash savers looking for the best savings accounts could be in for a treat this week as banks boost the interest rate on regular savings, with one bank pushing the rate to a captivating 7%.
While interest rates are still far from beating eye-watering inflation rates, 7% will certainly spark interest for those looking for a home for their cash holdings.
First Direct has launched the best market rate for regular savings with 7% interest, up from 3.5% - and its sister bank HSBC is has boosted its interest rate on the regular saver account from 1% to 5%. We have all the details below on who can get these and how - as well information on other regular saver options on the market right now. You can also sign up to our newsletter, where we will send you the latest rates and updates on savings accounts.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
And, if you do not have current accounts with these banks, then you can also switch current accounts and bag a ‘free’ switching bonus.
Here are the best regular savings accounts on the market.
The best regular savings accounts
Regular savers come with a few more restrictions than easy access or fixed term savings accounts, such as how much you put in a month and access to withdrawals, so make sure to pick one that suits you.
Skipton Building Society - 7.5% AER
The best rate on the market, Skipton is offering 7.5% on a maximum deposit of £250 per month on its Member Regular Saver.
One condition is attached: you must have been a member of the building society since 31 May 2023.
You can skip monthly deposits and early closure of the account is allowed. You can open the account online, via the app, in branch, by phone or by post.
After one year you can search for a better rate as the deal ends.
First Direct - 7% AER, plus £175 switching bonus
First Direct has doubled the rate on it's regular saver, which jumped from 3.5% to a handsome 7%.
You can pay in between £25 to £300 into the account each month.
To benefit from the 7% rate you will need to be a First Direct current account holder. The rate will only be available for 12 months after which it may drop.
Via this link, if you do not have a First Direct current account* you can open the account now. The good news is if you switch to it, you can also bag a £175 cash bonus. To qualify for the switch bonus, you need to use the bank's switching service and be a new customer (you do not qualify if you have previously had a First Direct product or had a HSBC current account on or after January 2019). You must pay in at least £1,000 within three months of opening the account.
First Direct will pay your £175 bonus into your account within 28 days of you meeting all the eligibility criteria.
*When you sign up via this link, we may earn an affiliate commission from this deal.
Lloyds Bank Club Monthly Saver - 6.25% AER
Lloyds is offering 6.25% on a maximum deposit of £400 per month to give some certainty the rate is fixed for one year.
As it’s a Club Saver, you need to hold a Lloyds current account already, be a Lloyds Club customer and you can’t have opened this same account in the last 12 months.
A minimum monthly payment of £25 is required and if you want to be flexible with your cash, this account has no restrictions on withdrawals. After one year you can search for a better rate as your account will become a standard saver.
Natwest Digital Regular Saver - 6.17% AER
With just £1 you can open this Natwest Digital Regular Saver, but the 6.17% rate is only available on balances up to £1,000. After that the rate drops to 1% on balances between £1,000 and £5,000 and a further drop to 0.5% on balances above £5,000. So if you want to save more than £1,000, this might not be the best rate around.
You must be a Natwest current account holder to be eligible for this account and the maximum you can put it per month is £150. The regular saver does offer flexibility with withdrawals, allowing you to access your money whenever you want and the rate on this account is variable.
Royal Bank of Scotland Digital Regular Saver - 6.17% AER
With only a minimum monthly deposit of between £1 and £150 the account allows you to top up your Digital Regular Saver with the spare change every time you spend on your debit card.
The 6.17% rate is fixed for a year and then the account will change into an instant access savings account, when it will be a good time to search for a new and better rate.
Beehive Money Online Fixed Regular Saver - 6% AER
You can open this account with a minimum£10 and then save a maximum of £250 a month for a year.
You can make multiple deposits within a month as long as it doesn’t exceed the maximum monthly amount and, if needed, you can miss as many monthly payments as you like.
Note that withdrawals are not permitted until the term ends so you need to be sure you won’t need access to it, however, keep it in there without any withdrawals and you'll receive a lump sum of interest.
Bank of Scotland Regular Saver - 5.5% AER
With only a minimum monthly deposit of £25 and no restriction on withdrawals, you can take advantage of this rate by putting away a maximum £250 a month. But note, whatever you withdraw can not be put back into your account.
The 5.5% rate is fixed for a year and then the account will change into an instant access savings account, when it will be a good time to search for a new and better rate.
Halifax Regular Saver - 5.5% AER
A minimum deposit of £25 is required before the 25th of each month, and you can save up to a maximum £250 per month.
The 5.5% rate is fixed for 12 months and when you open the regular saver, you will also need to open a Halifax Everyday Saver as part of the application. It means after the 12 months, your savings and interest earned will be paid into the Everyday Saver and your regular saver will renew for another 12 months.
Barclays Rainy Day Saver - 5.12% AER
The Barclays account pays 5.12% interest on up to £5,000. You'll need to have a Barclays current account and be a member of its 'Blue Rewards' scheme to apply.
It doesn't limit you to a set amount each month like other accounts - but you can still use it to save regularly if you prefer. Above £5,000, it only pays 0.65% so it's only worth it for sums smaller than this.
How does Blue Rewards work? You need to be registered for online or mobile banking and pay in at least £800 each month to qualify. There's also a £5/month fee to join, though it gives £5 cashback each month if you have two or more direct debits – so the fee is essentially cancelled out.
HSBC Regular Saver - 5% AER
HSBC boosted the rate from 1 % to 5% on its regular saver account in December.
The regular saver account allows you to put away up to £3,000 - and you can pay in between £25 and £250 per month. This rate is fixed for 12 months after which the rate may go down.
To benefit from the 5% interest regular saver account, you will need a HSBC current account - and you can open the account now.
The account is free, but you will need a minimum of £1,500 paid into the account within 60 days of opening the account and should be switching over at least two direct debits.
How does a regular savings account work?
Compared to other types of saving accounts, there are more caveats to consider when opening a regular savings account. Here’s what to look out for.
A minimum monthly payment of £25 is required and if you want to be flexible with your cash, this account has no restrictions on withdrawals. After one year you can search for a better rate as your account will become a standard saver.
Existing customers - Most regular savers offer the best rates to their existing customers, just like in our best regular savings accounts list. So, it might be that you don’t get the top rate, but you get the best rate available to you, depending on what current accounts you hold.
Monthly payments - To receive the best rates, a lot of regular savers ask for a minimum payment each month. They may not be big as some only require £25 or even £10 a month, but it’s important you don’t forget to pay in as you could risk losing the account.
Your cash is protected - The Financial Services Compensation Scheme protects all of the banks mentioned in our best regular savers on balances up to £85,000. So it’s good to spread your money across your current accounts and savings to ensure you don’t have more than £85,000 in any one account.
-
August NS&I Premium Bond winners unveiled - have you scooped £1m?Two lucky NS&I Premium Bond winners are now millionaires in the August draw. Find out here if you are one of them
-
Savings rates more than double in a year as challenger banks top the best buy tables
The best savings rates have doubled - and in some cases tripled - in a year, with challenger banks offering the highest rates. While they are still no match for inflation, we look at what you could be earning.
-
Midlife MOT: what is it and who can get one?
The government has launched an online midlife MOT to help older workers with financial planning, health guidance and career skills. But how does it work, who can get one and would you pass it?
-
Coventry Building Society launches new best easy access savings account
Coventry Building Society's deal tops our easy access savings account list, but could your cash be put to better use?
-
NS&I boosts fixed-term savings rates
The NS&I, the government-backed savings institution has mirrored recent rate rises seen elsewhere in the market.
-
Should you let AI give you financial advice?
Can AI fill the financial advice gap? Kalpana Fitzpatrick looks at the pros and cons of using AI to guide your finances.
-
Small pension pots to be consolidated, says DWP
Workplace pension schemes worth less than £1,000 that become “deferred” when a saver changes jobs will be consolidated under a new system
-
Watchdog summons banks to explain paltry savings rates
Savings rates trail mortgage rates - and the financial watchdog has summoned banks to a meeting amid concerns of profiteering.
