Top-Yielding Standard Savings Accounts Offering Maximum Returns of Around 7% Interest Rate
Savvy savers can take advantage of interest rates as high as 8% by steering their dough towards regular savings accounts. These accounts help build up a cash reserve and instill a saving habit, allowing you to put away smaller amounts – anything from £25 to £300 per month.
Regular saver accounts can be an excellent way to bolster your savings pot, especially if you stick with monthly deposits. The higher headline interest rate gives these accounts an edge, even though the actual interest earned is only about half the rate of the account when you save monthly, instead of as a lump sum.
If you put away £300 a month in a regular saver boasting a 7% interest rate, you'd earn yourself £136.50 in interest over 12 months. On the other hand, saving a £3,600 lump sum in a one-year bond with the same interest rate would earn you £252.
Regular savers are a fantastic means of nudging even the most reluctant savers into the daily saving mindset, and the sense of balance growth can motivate you to persist with the habit. Remember, the hardest part is usually setting up the savings account in the first place.
Now that you've got a feel for regular savings accounts, here are some top-performing options offering flexible withdrawals, multiple perks, and generous rates:
First Direct - 7%: Best for high interest
First Direct's regular saver permits you to save up to £300 a month and awards a satisfying 7% interest rate on each deposit. You can save a minimum of £25 a month, making it an attractive choice for those saving on a more humble scale.
To open this account, you'll need to be a First Direct customer, which you can become by signing up online or through their mobile banking app. One small drawback: you can't make any withdrawals before the 12-month term ends, so plan accordingly.
Nationwide - 6.5%: Best for flexible withdrawals
For those who would like to enjoy a bit more freedom, Nationwide's regular saver offers the best withdrawal flexibility. Savings accounts holders with a current account can contribute up to £200 a month and withdraw as many as three times over the 12-month term. Be cautious, though; if you make four or more withdrawals, the interest rate will drop to a measly 1.75% for the remainder of the term.
You must have a Nationwide current account to access this regular saver. Customers can apply online or via the mobile banking app, though it's not available through a branch.
Coventry - 5.5%: Best for additional perks
Coventry's loyalty regular saver account rewards members with a 5.5% interest rate and the opportunity to enter a prize draw for a share of £50,000. To be included in the draw, members must join Coventry Building Society before the end of the previous year and have at least £100 in the loyalty regular saver by 31 May 2025. This gives you multiple chances to gather some extra cash.
Minimum balance is only £1, and you can save as little or as much as £250 a month, as long as you don't exceed the monthly limit.
Aldermore - 5%: Best for unlimited withdrawals
Aldermore's regular saver comes with an impressive 5% interest rate, and the best bit is that the account has unlimited withdrawals. Regardless of how many times you dip into your savings, the interest rate won't drop as it would be if you exceeded the allowed number of withdrawals with other regular saver accounts.
While you don't have to be an existing customer to open this account, it can only be inaugurated online on Aldermore's website.
Ford Money - 4.75%: Not attached to current account
Ford Money boasts a regular saver with interest-bearing capabilities and an impressive 4.75% interest rate. The account does not require depositors to have a current account with the bank, and there are no limits on withdrawals.
Ford Money allows you to save between £25 and £200 a month, making it accessible to savers with varying income levels.
If you compare these regular savers to Help to Save – a type of savings account offered by the government to help low-income individuals build a savings pot – some clear differences come to light. Unlike traditional savings accounts, Help to Save deals only pay a bonus, rather than interest.
Savers can contribute between £1 and £50 each month, yet they are not required to deposit funds every month. The key advantage of Help to Save is the bonus of 50 pence for every pound saved over four years, with bonuses paid out in the second and fourth years. If you put in the maximum of £50 per month, you will receive a £25 bonus after two years and at the end of the account, amounting to a total of £1,200 in savings plus bonuses.
Help to Save is only accessible to those who receive Universal Credit and earn at least £1 a month. While maximum annual savings allowed in regular savers are typically higher, Help to Save could be a more suitable option for those eligible and eager to begin building their savings deposit.
The Verdict
Regular savings accounts and one-year bonds have their advantages and disadvantages when it comes to saving lump sums. Regular savings accounts present higher interest rates and encourage savings discipline, but come with restrictions, variable rates, and caps on savings. One-year bonds provide fixed returns, low risk, and are suitable for lump sum investments, though they may offer lower interest rates compared to some regular savings accounts.
When deciding which account is best for you, consider your savings habits, the amount of funds you're looking to save, and how much flexibility you need with withdrawals and interest rates. If you're aiming to grow your savings quickly and can commit to regular deposits, regular savings accounts may be the answer. If you prefer more flexibility and have a larger sum to invest, a one-year bond could be the wise choice. Ultimately, take the time to compare accounts, weigh your options, and make an informed decision.
- Savvy savers can potentially earn higher commissions with a personal-finance strategy that involves investing in regular savings accounts.
- The links between personal finance, mortgages, and banking frequently highlight the importance of savings in overall wealth management.
- In comparison to lump-sum investments, regular savings accounts encourage a personal-finance habit while offering higher interest rates.
- Those seeking more flexibility in their savings accounts might find appealing options in First Direct's high-interest regular saver or Nationwide's account with flexible withdrawals.
- For comprehensive perks alongside an attractive interest rate, savers may want to consider Coventry's loyalty regular saver, offering additional rewards and a prize draw.
- Furthermore, individuals with varying income levels might find the unlimited-withdrawal options provided by Aldermore's regular saver or Ford Money's account more suitable for their needs.
