Readers frequently ask me what the best regular savings account is.
These are accounts designed for savers who save money each month and reward you with a generous interest rate.
I wish there was a simple answer and I could recommend the account with the best rate.
But what should be a simple account usually ends up with a lot of terms and conditions.
Most regular savings accounts last for one year. Your money is then transferred to an account that pays much less interest, so be prepared to move it to a better home.
New Offers: Regular Savings Accounts are accounts designed for savers who save money every month and reward them with a generous interest rate.
Some pay variable rates, others fixed. Some allow you to withdraw money whenever you want, others make you wait a year, and others penalize you for making withdrawals.
But several newer banks have begun launching regular savings accounts with simpler rules.
The latest, Step Up Saver from Ford Money, launched this week and pays 4.75 per cent, which is fixed over the year at up to £200 a month.
The great advantage is that you can dip into your savings at any time without losing interest. After one year, your money is transferred from the Step Up Saver to the easy-access Flexible Saver. At 4.6 percent, that’s not a bad rate.
Aldermore’s Regular Saver pays a higher 5.25 per cent up to £300 a month, but the rate is variable so could go down during the year. Your money ends up in your Easy Access Account, which currently pays 4.5 percent.
But when choosing one of these accounts, your first port of call should be your current account provider.
They maintain their headline rates of up to 7 per cent for regular savers who have checking accounts with them, as long as you stick to their terms and conditions.
But with all providers except NatWest and RBS, you need to make sure you transfer your money after a year. Otherwise, you’ll end up with their lousy easy-access accounts that often pay less than 2 percent.
Among the best is First Direct, with a fixed rate of 7 per cent on savings of £20 to £300 a month. But it doesn’t allow you to touch your money during the year.
Co-op Bank’s 7 per cent allows you to dip into your savings. But the rate is variable so it can go down at any time.
Nationally, at a variable rate of 6.5 percent, only three withdrawals are allowed during the year.
NatWest Digital Saver pays 6.17 per cent and allows you to withdraw money at any time.
Marcus cuts its online savings rate
Unwanted news from Marcus. Next Saturday, he will reduce the rate he pays on my online savings account.
So far, easy access rates have held up well to the threat of lower interest rates in the future.
Some providers, including Paragon and Close Brothers, have withdrawn their higher-paying accounts or replaced them with lower rates for new savers.
But the Marcus rate – including the 0.49 percentage point bonus paid over one year – is falling from 4.75 percent to 4.55 percent.
Now I know that interest rates are expected to go down. But the Bank of England has yet to lower its base rate from 5.25 per cent, and if it lowers its base rate, Marcus could cut my rate again.
But since it’s a competitive rate, I left my money there, for now.
sy.morris@dailymail.co.uk
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