Regular Savings Accounts

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Regular Savings Accounts

These accounts are designed for people who want to make regular deposits, usually of a set amount, into the account each month.

Although these accounts enable your savings to grow quickly, they have the most restrictions and conditions attached, which if broken will lead to a loss of interest. However, these accounts can pay very high rates - at least six per cent and some also offer an annual bonus on top of their interest rate.

Banks will only offer high-rate regular savings accounts to customers who have a current account with them, as an incentive to build loyalty.

Most of these accounts limit the number of withdrawals you can make each year, making them a bad choice for emergency cash, but they can prove to be an ideal way of getting into the habit of saving.

A regular savings account can be opened with as little as £5 per month.

Pros of regular saver accounts

• Most accounts are variable - if the base rate increases the rate paid on these accounts will also increase within 30 days of the change.
• The amount being saved can increase quickly as a fixed amount is transferred into the account each month.
• Some offer an annual bonus on top of their interest rate.

Cons of regular saver accounts

• They have the most restrictions, i.e. a limited number of withdrawals and a minimum amount of deposits have to be made.
• Banks only offer high-rate regular savings accounts to customers who already have an account with them.
• There is a maximum and minimum amount which you can deposit each month - maximum usually limited to £1,000.
• Lump sum deposits cannot be made into the accounts.