Best rates - regular savings accounts
We found 65 PRODUCTS in total, of which 2 are EASY TO OPEN
Leeds BS Home Deposit Saver
Aldermore Regular Saver Account (Issue 3)
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A regular savings account, sometimes called a monthly saver, is a type of savings account that requires you to make a deposit on a regular basis, typically every month.
They can pay a higher rate than many other types of savings accounts but, in return, they usually come with stricter terms and conditions. There will also normally be a limit on the total amount you can hold in the account.
Many regular savings accounts are only available to savers who have a current account (or other account) with the provider, or to those who live in certain postcodes. However, there are some that are more widely available.
Every regular savings account has different terms and requirements but, as a rule, they will all set a minimum and maximum sum you need to deposit each month. The minimum could start from as little as £1 (although some providers may not even require a minimum monthly deposit), while the maximum deposit could go up to several hundred pounds.
You could set up a standing order to make a single payment each month, but other providers may allow you to pay in a different amount each month or make multiple payments, up to the monthly limit.
If you don’t pay in the maximum amount each month, some accounts may allow you to “catch up” by depositing more in later months (as long as you don’t exceed the overall balance limit). However, not all providers allow this.
Some providers may allow you to miss a monthly payment but others may apply a penalty if you don’t pay in the required sum.
Many regular savings accounts have a set term, often 12 months, after which the account may revert to a standard account.
While some regular savings accounts may allow withdrawals during the term, some accounts may apply restrictions and won't allow savers to access their money for one year, for example.
The interest you can earn on a regular savings account will depend on the account and provider you choose, as well as the amount you deposit.
Interest rates on regular savings accounts are typically higher than on other savings accounts but, because there are limits to the amount you can deposit each month, there is a cap on the total amount of interest you can earn.
As a result, you may not earn as much interest as you expect based on the headline rate.
For example, if you deposit £100 into a regular savings account each month for one year, you will only earn interest on £100 in the first month, £200 in the second month and so on. As a result, you would only earn interest on the full £1,200 on the final month.
This means that, if the interest rate on this account was 6.00% AER, you would earn approximately £39 in interest over the year.
You can use our monthly savings calculator to estimate how much interest you could earn by depositing a certain amount into savings each month.
By contrast, if you deposit £1,200 in another savings account as a lump sum, you will earn interest on the full amount from day one.
If this account also paid 6.00% AER, you would earn around £72 in interest over one year. Even if the account paid a lower 4.00% AER, you would still earn £48 in interest, more than the regular saver example above.
As a result, if you have a significant lump sum to deposit, you may earn more interest overall by depositing it into a fixed bond or other savings account, even if it pays a lower rate than a regular saver. Read more on how interest payments work on regular savings accounts.
It’s worth noting that regular savings accounts can pay a fixed or variable rate of interest. If it has a variable rate, bear in mind that the interest rate could drop (or increase) whereas a fixed rate is guaranteed for a specified period.
Regular savings accounts have a number of benefits and may be worth considering if:
However, these accounts have some disadvantages and may not be suitable for you if:
Because regular savings accounts often come with specific terms and conditions, it’s important to check these before opening an account to see if it’s right for you.
If a regular saver isn’t for you, there are other types of savings account you could consider, such as:
Bear in mind that you can have a combination of savings accounts, so you could have a regular savings account alongside an easy access savings account, for example.
This could also help you to maximise the interest on your savings as you could deposit a lump sum into an easy access account and transfer money into a higher-paying regular savings account each month.
If you’re receiving Universal Credit, you may be eligible to open a Government-backed Help to Save account. These accounts allow you to deposit between £1 and £50 each month, with the Government paying a 50p bonus for every £1 you save. Learn more in our Help to Save guide.
It’s possible to have multiple regular savings accounts with different providers if you choose. However, you may not be able to open more than one regular savings account with the same provider.
You are liable to pay tax on any interest you earn on a regular savings account in the same way as any other savings account. As a result, if the amount of interest you earn across your savings accounts breaches your Personal Savings Allowance (PSA), you will need to pay tax.
This depends on the account. Some regular savings accounts only pay the rate for a specified period, often 12 months. After this point the account may revert to a standard savings account. Other regular savings accounts may pay a variable rate, which means the provider could change the initial advertised rate at any point.
Regular savings accounts can be appealing to over-60s wanting to make the most of their money because of the competitive interest rates they offer. These accounts don’t typically have an age limit, so savers of any age can usually open one.
As with any account, all savers (including those aged over 60) should look at the terms and requirements before deciding where to put their money, not just the interest rate. For example, over-60s may not want the pressure of needing to make a minimum deposit every month, or they may want the option to withdraw from their savings without penalty to cover any unexpected expenses.
Many high street banks and building societies offer regular savings accounts, which may appeal to any over-60s who prefer to deposit their money with a traditional brand or manage their accounts in a branch. However, it’s always worth considering other online providers; see our chart above to compare options.