The best regular savings accounts earning you up to 7% in interest
Good news for savers, the Bank of England’s Monetary Policy Committee voted earlier this month to retain the current 3.75 per cent base rate.
But given that the war in Iran threatens to raise prices and fuel inflation, it’s even more important to make sure you’re getting the best return on your savings. The latest Consumer Price Index (CPI) inflation reading was 3 percent in February; However, these data are from before the Iran war and experts expect inflation to increase.
If your savings account pays less interest than this, your money is losing real value; So it’s worth reading our list of the best cash ISAs, easy-access accounts and fixed-term savers and changing your account accordingly.
But there is a way to earn even more; When you save regularly, you pay into your account every month and are rewarded with a better interest rate.
The benefits of saving regularly – as well as a higher interest rate – is that it can help people develop the habit of saving without dipping into that cash, then at the end of the term (usually a year) you’ll have some money plus interest from which you can actually build your savings base.
Below we’ve outlined regular savers who offer interest of at least 7 per cent AER (annual equivalent rate). Make sure you choose the right account for your circumstances, as each has its own requirements, limits, and use cases. Prices are correct at the time of writing but always check for the latest deals.
Zopa Bank
Zopa currently offers the highest paying regular savers with 7.1 per cent AER. However, this rate is variable, meaning it may decrease over the period.
You’ll be able to save up to £300 a month for 12 months – up to £3,600 in total. Moreover, you will be able to access your cash in a short time if you need it.
Get a free partial share of up to £100.
Capital is at risk.
Terms and conditions apply.
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Get a free partial share of up to £100.
Capital is at risk.
Terms and conditions apply.
ADVERTISING
All in all, if you max out the allowances you’ll be able to earn around £137 in interest, leaving you with roughly £3,737 at the end of 12 months.
That might not sound like a lot of interest, but getting the best rates is key to compounding your savings over time. You’ll be able to use your £3,737 to fund a new regular saver or increase your easy access or fixed rate account; this can make a big difference in your grand total.
To qualify you need to open a bank ‘Biscuit’ account – see. ZopaWebsite for all information.
first direct
The initial direct offer is 7 percent AER, a similar rate to Zopa, but this is fixed over the 12-month period.
You’ll be able to save between £25 and £300 a month. By investing the maximum amount throughout the year, you can earn up to £136 in interest, payable at the end of the term.
Like Zopa’s guardian, you’ll need to open a direct current account first to be eligible. You then create a standing order and choose the amount you want to pay each month. You will be able to change this amount later if you change your mind.
To benefit from the higher rate, you must leave your cash until the end of the period. If you withdraw early you will get a much lower rate. To see first directWebsite for full details.
Cooperative Bank
This regular saver offers the same rate as the first direct savings at 7 percent. But you can only pay £250 a month and the rate is variable rather than fixed. If the Cooperative bank decides to reduce the interest rate, it says it will give you at least two months’ notice.
You will receive your interest at the end of maturity. Maximize your monthly payments and you’ll get around £114, saving you a total of £3,114.
In terms of withdrawals, you can withdraw as much as you want, but you’ll still only be able to pay out £250 a month.
Again, you must open a current account to qualify; see Cooperative Bankwebsite.
Those who save more regularly
There are other big names offering 6 percent or more to regular savers:
Rates change frequently and the best deals may withdraw at short notice; Make sure your money is working hard for you.
When investing, your capital is at risk and you may get back less than you invested. Past performance does not guarantee future results.
