Lloyds Bank has launched a bumper 8% regular savings account that lets customers earn £120 in a year. Savers can deposit up to £250 every month in the Lloyds Monthly Saver, meaning you would have a maximum balance of £3,120 after the 8% interest is paid.
The interest is fixed throughout the 12-month term, and you can withdraw your money when you like without charge, a perk compared to many regular savings accounts that can penalise you for early access. However, there is one catch. You must be a Lloyds current account holder to open the account, and you mustn’t have opened a Monthly Saver in the last 12 months.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said the account is attractive to existing customers but acknowledged it is not suited to everyone, as investments are limited to £250 a month. She said: “The account is available to Lloyds current account customers and is a strong incentive for existing customers to engage more actively with their savings.
“However, while the headline rate is undoubtedly attractive, consumers should remember that regular savers limit monthly deposits, meaning they may not be suitable for those with larger lump sums to invest.
“In such cases, it is wise to compare rates across easy access accounts, notice accounts and fixed bonds to ensure all spare cash is working as hard as possible.”
The minimum monthly deposit is £25, making it ideal for those who also want to save smaller amounts of money each month. The maximum people can save is £250 per month in the account. After 12 months, you’ll earn interest, and the account will change to a Standard Saver, or you can open a new Monthly Saver.
The Bank of Scotland also offers a regular savings account with an interest rate of 8% AER. As it’s a part of Lloyds Banking Group, the same account conditions apply. Savers can put away between £25 and £250 per month, and interest is fixed for 12 months. Withdrawals are permitted without charge, and savers who deposit the maximum amount each month will amass £3,120 over 12 months, including the 8% interest.
Santander joins its competitors in the top spot for regular savings accounts with an interest rate of 8% AER. It includes a 5% AER bonus for one year, and allows customers to put up to £200 away per month. After 12 months, the interest reduces to 3.00% AER/gross. Interest is paid at the end of the term, with a full £2,400 deposit estimated to earn around £104. Withdrawals can be made at any time without penalty.
Zopa offers a 7.1% AER over six months, with a £300 per month limit, allowing savers to amass £1,800 in total. Interest is paid at the end of the term, with a full £1,800 deposit estimated to earn around £80. Savers can withdraw funds from the Zopa savings account at any time without penalty. However, they’ll only be able to replace the money within the £300 monthly allowance. For example, if you withdraw £500 but want to put money back in, you can only deposit up to £300.