In good news for savers, the Bank of England’s Monetary Policy Committee voted to maintain the current base rate of 3.75 per cent earlier this month.
But with the war in Iran threatening to increase prices and raise inflation, it’s even more important to make sure you’re getting the best returns on your savings. The most recent Consumer Prices Index (CPI) inflation reading was 3 per cent in February – but this data is from before the Iran war, and experts are expecting inflation to increase.
If your savings account is paying less interest than this, your money is losing value in real-terms, so it’s worth reading our lists of the best cash ISAs, easy access accounts and fixed-term savers and switching your account accordingly.
However, there is a way to earn even more; with a regular saver, you pay into the account each month and are rewarded with a better interest rate.
The benefits of a regular saver – aside from a higher interest rate – is that it can help people build a habit of saving without dipping into that cash, then at the end of the term (often a year) you’ll have a chunk of money available, plus interest, to really build up your savings base from.
Below, we’ve rounded up the regular savers that are offering at least 7 per cent AER (annual equivalent rate) in interest. Make sure you choose the right account for your circumstances, as each one has its own requirements, limits and use cases. Rates are correct at time of writing but always check for the latest deals.
Zopa Bank
Zopa currently offers the top-paying regular saver at 7.1 per cent AER. However, this rate is variable, meaning that it could decrease during the term.
You’ll be able to save up to £300 a month for 12 months, which is £3,600 in total. Plus, you’ll be able to access your cash on short notice if you need it.
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Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
Go to website
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All in all, you’ll be able to earn around £137 in interest if you max out the allowances, leaving you with roughly £3,737 at the end of the 12 months.
This may not sound like a ton of interest, but utilising the best rates is the key to compounding your savings over time. You’ll be able to use your £3,737 to fund a new regular saver, or boost your easy-access or fixed rate account, which can make a huge difference to your overall sum.
You need to open the bank’s ‘Biscuit’ account to qualify – see Zopa’s website for full information.
First direct
First direct offer a similar rate to Zopa at 7 per cent AER, however, this is fixed across its 12-month term.
You’ll be able to save between £25 and £300 a month. By investing the maximum across the year, you could earn up to £136 in interest, which is paid out at the end of the term.
Like Zopa’s saver, you’ll need to open a first direct current account to be eligible. Then, you set up a standing order and choose the amount you want to pay each month. You’ll be able to amend this amount later if you change your mind.
To get the higher rate, you’ll need to leave your cash be until the end of the term. Withdraw it early and you’ll get a much lower rate. See first direct’s website for all the details.
Co-operative Bank
This regular saver offers the same rate as first direct at 7 per cent. However, you’ll only be able to pay in £250 a month, and the rate is variable as opposed to fixed. If Co-operative bank decides to cut the rate, it says it’ll let you know at least two months before.
You’ll get your interest at the end of the term. By maxing out the monthly pay-ins, you’ll get around £114, leaving you with £3,114 in savings altogether.
In terms of withdrawals, you can take out as much as you like, but you’ll still only be able to pay in £250 a month.
Again, you’ll need to open a current account to qualify – see Co-operative Bank’s website.
More regular savers
There are other big names offering 6 per cent or more on regular savers:
Rates are frequently changed and the best deals can be withdrawn at short notice – make sure your cash is working hard for you.
When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results.
