Snap up a regular savings account paying up to 3% for any leftover cash to beat pathetic current account rates
Savers not yet ready to invest, should snap up a regular account if they have cash to spare every month.
There is a record £1 trillion languishing in easy-access and current accounts. Yet the average easy-access rate is now just 0.19 per cent, with all major banks paying a pathetic 0.01 per cent.
Even the top easy-access deal currently on offer only pays 0.55 per cent. Regular savings accounts, on the other hand, are offering between 1 per cent and 3 per cent.
The average easy-access rate is now just 0.19 per cent, with all major banks paying a pathetic 0.01 per cent. Even the top easy-access deal currently on offer only pays 0.5 per cent
The rates are more generous because providers limit the amount you can put away each month to a small three-figure sum.
But at 1 per cent, even a maximum £250 monthly saving would still net you more interest over the year than if you left the £3,000 lump sum in an account paying just 0.01 per cent.
You would get £16.30 a year interest with the regular saver, compared to only 30 pence with a High Street bank’s easy-access deal.
The difference may not be huge, but opening an account now gets you in the habit of seeking out the best deals for when rates do rise.
The simplest deals are Virgin Money’s Regular E-Saver and Nationwide’s Start To Save.
Both pay 1 per cent. Nationwide reserves the right to change the rate at any time, but the Virgin rate is fixed for a year.
Nationwide limits deposits to £100 a month at most, and with Virgin it’s £250. Unlike many regular savings deals, you can take money out of either account whenever you want without facing hefty exit fees.
With Nationwide you may also qualify for one of their £100 prize draws.
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