Regular Saver Account

What is a regular saver account?

A regular saver account pays a high interest rate (the percentage a bank pays you for keeping money with them). Often the highest available. But there are conditions. You must pay in every month, usually between £25 and £300, and you typically can’t withdraw until the year is up.

How much will you actually earn?

Less than the headline rate suggests, but more than most other accounts.

The account does pay the advertised rate. But your money builds up over the year. Your first deposit earns interest for 12 months. Your last deposit earns interest for just one month. On average, your money is only in the account for half the year.

Rule of thumb: expect roughly half the headline rate on your total deposits. A 7% regular saver with £200 monthly deposits earns about £90. Not £168. That’s still more than you’d get in most easy access accounts.

What are the rules?

Each account has different conditions. Common ones include:

• Must pay in every month. Miss one and you might lose the rate
• Maximum monthly deposit. Often £200-£300
• No withdrawals for 12 months
• Must hold a current account with the same bank

When are they worth it?

Almost always, if you can get one. They’re especially good if you’re building savings from scratch. The high rate and forced monthly habit help you grow your pot.

If you already have a lump sum, you can still benefit. Keep the lump sum in an easy access account and drip feed into one or more regular savers each month. You earn the high regular saver rate on the money going in, plus interest on the remaining lump sum while you wait.

Key points about regular saver accounts

• Often the highest interest rates available
• Expect roughly half the headline rate in actual earnings
• Must pay in monthly. Miss a payment and you may lose the rate
• Good for building savings gradually

More information

Scrimpr links to official sources so you can verify what you’ve learned.

• Money Helper: Regular savings accounts