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The Best Regular Savings Accounts

Updated: 18th September 2020

Some people may stay away from regular savers because of the restrictions and requirements. For instance, many require a deposit every month, and may restrict the number of withdrawals. But the obvious advantage is that interest rates are higher than most other savings accounts. And there’s a secret benefit too: the required monthly deposits can help you establish savings as a habit.


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Here are MyWalletHero’s picks for the best regular savings accounts:

Great for: Competitive interest on regular monthly savings
4.5 stars question mark
First Direct logo
  • Interest Rate (AER):

    2.75%
  • Account Type:

    Regular Saver
  • Account Minimum:

    £25
  • Account Maximum:

    £3,600

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £300 each month - up to £3,600 per year
  • If your regular monthly payments are less than the £300 max, you can carry your allowance over and pay more in later months
  • You can change your standing order amount at any time
  • Only available to First Direct Current Account holders
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the standard savings interest rate

what we like

  • Highly competitive interest rate
  • Save between £25 and £300 each month
  • You can change your standing order amount at any time

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £300 each month - up to £3,600 per year
  • If your regular monthly payments are less than the £300 max, you can carry your allowance over and pay more in later months
  • You can change your standing order amount at any time
  • Only available to First Direct Current Account holders
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the standard savings interest rate

DISCLAIMER

Great for: Competitive interest on regular monthly savings
4 stars question mark
HSBC logo
  • Interest Rate (AER):

    2.75%
  • Account Type:

    Regular Saver
  • Account Minimum:

    £25
  • Account Maximum:

    £3,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £250 each month - up to £3,000 per year
  • If your regular monthly payments are less than the £250 max, you can carry your allowance over and pay more in later months
  • Only available to HSBC current account holders
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the Flexible Saver interest rate

what we like

  • Highly competitive interest rate
  • Save between £25 and £250 each month
  • You can carry over unused allowance into other months

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £250 each month - up to £3,000 per year
  • If your regular monthly payments are less than the £250 max, you can carry your allowance over and pay more in later months
  • Only available to HSBC current account holders
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the Flexible Saver interest rate

DISCLAIMER

Great for: Competitive interest on regular monthly savings
4 stars question mark
M&S Bank logo
  • Interest Rate (AER):

    2.75%
  • Account Type:

    Regular Saver
  • Account Minimum:

    £25
  • Account Maximum:

    £3,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £250 each month - up to £3,000 per year
  • If your regular monthly payments are less than the £250 max, you can carry your allowance over and pay more in later months
  • You can change your standing order amount at any time
  • Only available to M&S Current Account holders
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the Everyday Savings Account interest rate

what we like

  • Highly competitive interest rate
  • Save between £25 and £250 each month
  • You can carry over unused allowance into other months

WHAT YOU NEED TO KNOW

  • 2.75% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £250 each month - up to £3,000 per year
  • If your regular monthly payments are less than the £250 max, you can carry your allowance over and pay more in later months
  • You can change your standing order amount at any time
  • Only available to M&S Current Account holders
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, if you need to close the account before the year is up you will only receive the Everyday Savings Account interest rate

DISCLAIMER

Great for: Earning interest on regular saving, open to all
3.5 stars question mark
Coventry Building Society logo
  • Interest Rate (AER):

    1.85%
  • Account Type:

    Regular Saver
  • Account Minimum:

    £1
  • Account Maximum:

    £6,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • 1.85% flexible interest rate (can go up and down)
  • Interest paid at the end of 12 months
  • Save between £1 and £500 each month
  • Pay in as often as you like, as long as you do not exceed the monthly £500 limit
  • You can make withdrawals but they will be subject to a loss of interest
  • After 12 months your account will turn into an Easy Access Saver - with lower interest

what we like

  • Competitive interest rate
  • Available to anyone - no need to have an active account
  • Pay in as often as you like

WHAT YOU NEED TO KNOW

  • 1.85% flexible interest rate (can go up and down)
  • Interest paid at the end of 12 months
  • Save between £1 and £500 each month
  • Pay in as often as you like, as long as you do not exceed the monthly £500 limit
  • You can make withdrawals but they will be subject to a loss of interest
  • After 12 months your account will turn into an Easy Access Saver - with lower interest

DISCLAIMER

Great for: Competitive interest on regular monthly savings
3 stars question mark
Lloyds Bank logo
  • Interest Rate (AER):

    1.50%
  • Account Type:

    Regular Saver
  • Account Minimum:

    £25
  • Account Maximum:

    £4,800

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • 1.50% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £400 each month
  • Deposit payment needs to be in your account before the 25th each month
  • Only available to Lloyds Current Account holders who have not already opened one of these accounts in the last 12 months
  • Sole accounts only, and only one account per person
  • You can make as many withdrawals without charge as you like - but you cannot replace the money.
  • After 12 months your account will turn into an Easy Saver - with lower interest

what we like

  • Competitive interest rate
  • Save between £25 and £400 each month
  • You can make withdrawals at any time - without charge

WHAT YOU NEED TO KNOW

  • 1.50% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £400 each month
  • Deposit payment needs to be in your account before the 25th each month
  • Only available to Lloyds Current Account holders who have not already opened one of these accounts in the last 12 months
  • Sole accounts only, and only one account per person
  • You can make as many withdrawals without charge as you like - but you cannot replace the money.
  • After 12 months your account will turn into an Easy Saver - with lower interest

DISCLAIMER

Great for: Earning interest on regular saving, open to all
2.5 stars question mark
Halifax Logo
  • Interest Rate (AER):

    1.00%
  • Account Type:

    Regular Saver
  • Account Minimum:

    £25
  • Account Maximum:

    £3,000

Account protected by the FSCS up to £85,000

WHAT YOU NEED TO KNOW

  • 1.00% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £250 each month - up to £3,000 per year
  • Deposit payment needs to be in your account before the 25th each month
  • Change your standing order amount at any time
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, you can only access your money if you close the account
  • After 12 months your money, and the interest you have earned, will be transferred into an Everyday Saver account, which will be opened for you as part of your application

what we like

  • Competitive interest rate
  • Available to anyone - no need to have an active Halifax account
  • This account qualifies for the Halifax Savers Prize draw which gives you the chance to win cash prizes each month

WHAT YOU NEED TO KNOW

  • 1.00% interest rate fixed for 12 months
  • Interest paid at the end of that year
  • Save between £25 and £250 each month - up to £3,000 per year
  • Deposit payment needs to be in your account before the 25th each month
  • Change your standing order amount at any time
  • Sole accounts only, and only one account per person
  • No withdrawals during the 12 month period, you can only access your money if you close the account
  • After 12 months your money, and the interest you have earned, will be transferred into an Everyday Saver account, which will be opened for you as part of your application

DISCLAIMER


In this section:

What is a regular savings account?

A regular savings account is a type of savings account that requires you to deposit money each month, with interest paid annually. This makes it ideal for someone who is saving towards a goal in the future, or someone who wants to start a regular savings habit.

Interest rates for regular savings accounts tend to be higher than for other accounts such as easy access saver accounts or fixed rate bonds. But there are certain restrictions attached. Monthly deposits are required, and in most cases if you miss a deposit you will be penalised. Similarly, with regular savings accounts, you may not be able to access your money until the end of the term. Some accounts allow limited withdrawals, but you won’t be able to replace the money you took out.

A regular saver can be a good way to achieve a comparatively high interest rate and slowly build your savings pot. However, you need to understand how these accounts work and what limitations they have in order to make the most of them.

What are the benefits of a regular savings account?

The main benefit of a regular savings account is that such accounts tend to offer a higher interest rate. Because you are committing to regular deposits, and because there is a limit to how much you can deposit in a year, banks tend to offer more favourable rates than those for other cash savings accounts. And in a low interest rate environment, this can be attractive.

A regular savings account is also often used by banks and building societies to reward loyal customers. Banks offer some of the most competitive deals exclusively to their current account holders. Therefore, if you are a current account holder with that provider, you may have access to its regular savings account.

This type of account is also good for setting up a savings habit. By having a set amount that you need to deposit each month, you can ensure that your savings pot grows slowly over time. It also lends itself to savers who have a goal. If you have something you want to purchase a year away, a regular saver can help you keep on track.

How does a regular savings account work?

The main feature of a regular savings account is that you will need to make monthly deposits. So, when opening the account, you will need to decide how much to pay in each month and how to do so (e.g. by standing order).

Each account will have different requirements. But, for the most part, you will find a regular saver has a minimum or maximum amount you can deposit each month. For example, it may have a minimum deposit requirement of £10 a month and a maximum deposit of £1,000. Within that range, you can decide how much to deposit each month.

However, it is important to note that while some accounts allow you to change your monthly contribution amount and payment method during the term of the account, others do not.

A regular savings account typically lasts for 12 months, with the interest rate dropping after the account reaches maturity. Therefore, it is a good idea to make a note of when the 12 months will be up and then switch accounts to find a more competitive deal.

During the term of the account, you will not receive the full headline rate on the full amount. This is just because money is being drip-fed during the year, so your first deposit earns interest for a whole year, whereas your final deposit only earns interest for a month. If you would prefer to know exactly what you will have in your savings pot at the end of a term, a fixed rate bond would better suit your needs.

Any interest you earn on your regular savings account will be paid annually and may be taxed. However, you will not pay tax unless the interest you earn is above your personal savings allowance (£1,000 for basic rate taxpayers, £500 for higher rate taxpayers) or you are an additional rate taxpayer.

What restrictions are there with a regular savings account?

The main restriction with a regular savings account is that you typically will not be able to access your money during the term of the account.

Some providers allow limited withdrawals, but this may only be once during the 12-month term. And you may also find that you then cannot replace the money you took out. So, if you think you will need to access your savings in the near future, you may be better off considering an easy access account.

Another limitation of this type of account is that it is important that you don’t miss a monthly deposit. If you do, you could find that you are penalised in the form of lost interest or account closure.

Also, there is a maximum amount that can be saved in this type of account. This will depend on the monthly maximum deposit. If you have a lump sum to be deposited, a regular savings account probably isn’t the type of account for you.

Are my savings protected in a regular savings account?

Regular savings accounts are protected by the Financial Services Compensation Scheme (FSCS). Under the FSCS, savings up to £85,000 are protected if the financial institution providing the account fails.

It is important to note that this is £85,000 per financial institution. You could have multiple regular savers with different banks, and as long as you do not exceed the £85,000 threshold with any one bank, your money will be protected.


Frequently Asked Questions

What is a regular savings account?

A regular savings account is a type of savings account that requires you to make monthly deposits, with interest paid annually. They tend to have a higher interest rate compared with other savings accounts. You typically can’t access your money during the term of the account, and you may be penalised for missing a monthly deposit.

What are the benefits of a regular savings account?

A regular savings account tends to offer a comparatively high rate of interest when compared with fixed rate bonds and easy access accounts. It is also a good type of account to get you started with a savings habit, as it encourages regular deposits.