In this article, we’re exploring the best regular saver accounts for residents of the UK.
This article is part of our free series on opening specialized accounts, specifically how to open a bank account, which covers bank accounts for all stages of life and all possible scenarios.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Best Regular Saver Accounts
- Benefits of Regular Savings Accounts
- Who Can Open Regular Savings Accounts in the UK?
- Current Account vs Savings Accounts
- How Do I Open and Manage a Regular Saver Account?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
Best Regular Saver Accounts
Best regular saver accounts offer high-interest rates in exchange for your ongoing commitment to deposit with the bank. At present, these rates vary between 5% and 7%. However, the specific rules surrounding deposits, monthly contributions, and withdrawals vary widely.
Not surprisingly, it’s important to review all of the available options before settling on a bank, especially if you’re looking to open a children’s savings account or the best accounts to open. Otherwise, you may find that your bank doesn’t provide the flexibility that you desire for the account. Likewise, if you may want to skip a monthly contribution, you will need to choose a bank that allows you to do this as not all do.
Of course, the higher rates are generally reserved for larger monthly commitments and have more restrictions attached to the accounts. Restrictions might include never missing a month, no withdrawals, and maximums on the amount you can deposit.
With this in mind, if you are looking for more flexibility while still capturing high interest rates, you may want to consider exploring fixed deposit accounts or looking at tax-optimized accounts as these can provide good returns plus faster compounding.
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Benefits of Regular Savings Accounts
The main benefit of a regular savings account is the higher interest that account holders earn from the bank. In many cases, these interest rates can be up to two or three times more than you can access in a regular savings or current account. So, opening a regular saver account can offer substantial gains compared to the norm.
Additionally, regular saver accounts can be opened with a minimal deposit (often one pound) and only require the account holder to make reasonable deposits each month. When compared to other high-interest deposit products, this is a considerable benefit. Since most high-interest options require deposits starting at 5,000, 10,000, or more.
Here’s a closer look at the specific benefits that most people look for when opening a regular saver account.
Benefits of Regular Savings Accounts
- Higher interest than available elsewhere
- Certain accounts offer flexibility
- Ongoing access to your funds
- Almost no opening deposit
- Very low monthly commitments
- Wide range of options to choose from
Who Can Open Regular Savings Accounts in the UK?
Anyone can open a regular savings account in the UK if they are a resident of the United Kingdom and over the age of 16. In fact, regular savings accounts can be opened at both UK banks and UK building societies.
Importantly, a regular savings account offers the incentives it does because account holders are encouraged to maintain and grow deposits. This is in stark contrast to a current account, which does not expect account holders to grow their balance. With this in mind, here is a look at the difference between a current account and savings accounts.
Current Account vs Savings Accounts
The main difference between a current account and savings accounts is that a current account is used for day-to-day transactions while a savings account is intended for depositing and maintaining funds. With this in mind, it’s common for current accounts to offer a limited incentive to maintain or grow a balance while savings accounts typically encourage deposits with higher interest rates.
How Do I Open and Manage a Regular Saver Account?
You can open and manage a regular saver account completely online through your bank, this includes the account opening process and managing your monthly withdrawals.
Importantly, you are usually required to have an account with the bank before opening a regular saver account. This also allows you to set up direct transfers to meet monthly deposit commitments.
As for managing a regular saver account, depending on the bank you use, you may need to arrange (and cancel) stop payments any time you want to adjust your regular deposits.
If you’re ready to get started with opening, here’s a look at the specific requirements that you will generally need to meet.
Requirements for Opening Regular Savings Accounts
- Existing account with the bank (at most banks)
- Complete account opening application
- Meet the minimum deposit requirement
- Monthly deposit commitment
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking into opening the best regular saver accounts. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Is Money In a Regular Saver Account Safe?
Money in a regular saver account is as safe as any other deposit in your bank. In other words, the safety of your funds ultimately depends on the financial well-being, management, and practices of your financial institution. Of course, regular saver accounts are protected by the Financial Services Compensation Scheme, which covers deposits up to GBP 85,000 per financial institution.
Which Bank Gives 7% Interest on Savings Accounts in the UK?
One bank currently offers 7% interest on savings accounts in the UK, which is First Direct. However, they have very strict requirements compared to many of the other regular saver account options which have comparable rates between 5.5% and 6.5%. So, if you are looking for more flexibility while still capturing high interest rates it is still possible to do so elsewhere.
What Is the Best Savings Account in the UK?
The best savings account in the UK ultimately comes down to each individual applicant. In most cases, it requires applicants to consider how much flexibility they desire, how long they want to lock in deposits, and how much interest they ideally want to earn. That said, it is possible to open savings accounts ranging from 3% to 7%, depending on the type of account, duration of commitment, and deposit being made.
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