Yorkshire Building Society has relaunched its “popular” £50 Regular Saver account for the second year to celebrate UK Savings Week. Regular savings accounts can work well for those looking to get into a savings habit, as these accounts typically offer higher interest rates and the terms generally encourage savers to pay money into the accounts monthly.
Yorkshire Building Society’s account offers a competitive variable interest rate of 6% AER, and allows customers to save up to £50 per month over a 12-month period. Pete Lewis, senior savings manager at Yorkshire Building Society, said: “We’re proud to be supporting UK Savings Week again this year with the relaunch of our £50 Regular Saver. We know how important it is for people to build financial resilience, and we want to help them kickstart a healthy savings habit.
“This account promotes saving little and often, offers a strong return, and supports people in taking positive action towards their financial goals.”
Savers can open the account in branches, agencies, and online. The mutual said the initiative aims to support the goals of UK Savings Week by encouraging people to start and maintain a regular savings habit.
Based on the current interest rate, a maximum £600 deposit is estimated to earn £19.50 over 12 months, bringing the total balance to £619.50.
Savers can make three penalty-free withdrawals during the term, or withdraw funds if closing the account.
The account was launched last year following research from the University of Bristol’s Personal Finance Research Centre, sponsored by Yorkshire Building Society, which found that regular savings have benefits beyond finances. The study found that regular savers are 66% more likely to report high life satisfaction, regardless of income.
Mr Lewis continued: “We want to inspire a save-first, buy-later mindset – helping people put money aside before they spend, so they can reach their goals without falling into debt.
“Our £50 regular saver offers people a simple, powerful way to take control of their finances and feel good doing so.”
How does the account compare?
Principality Building Society is still topping the table for regular savers with an Annual Equivalent Rate (AER) of 7.5%. The account runs for six months, and interest is paid on maturity.
Savers can invest up to £200 per month, allowing the pot to grow to a total of £1,200, and withdrawals are not permitted until the account matures. So, while it may have a market-leading AER, its six-month term limits the total interest earned. With a maximum investment of £200 per month, savers will end up with £1,227.53, including £27.53 in interest.
Zopa offers a 7.1% AER over 12 months with a maximum limit of £300 per month, allowing savers to amass £3,600 in total savings. Interest is paid at the end of the term, with a full £3,600 deposit expected to earn around £137. This will bring the total balance to approximately £3,737. Savers are allowed to withdraw money from the Zopa savings account at any time without penalty
First Direct is just behind with a 7% AER over 12 months. The account allows a monthly deposit of £300, which can also total up to £3,600 in savings over a year. At the end of the term, First Direct says savers will amass around £3,736.50, including £136.50 in interest.
On the benefits of regular accounts, Rachel Springall, finance expert at Moneyfactscompare, said: “Regular savings accounts are ideal for slowly building a pot as they instil the savings habit.”
However, she pointed out: “Consumers will need to work out if they are the right choice for them, as some can be restrictive and might not be suitable for larger deposits.
“Regular savings accounts can also revert to a flexible account after the term ends, which might not pay a good rate, so savers must make a diary note to reinvest it elsewhere.”
