Cash boost as provider offers 'market leading' seven per cent interest rate savings account

First Direct has launched a regular savings account offering seven per cent interest to customers of its 1st Account.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, praised the digital bank's offering, describing it as a "great choice for savers looking to build a nest egg over the year".

She noted that a 12-month regular savings account "could be a great choice, particularly for consumers who have a goal in mind or want to improve their financial wellbeing".

The deal is accessible to both new and existing holders of the bank's 1st current account, though Ms Springall advised that since the offer is exclusive to these customers, "it's worth comparing this deal against other accounts".

First Direct has consistently performed well in customer satisfaction surveys, most recently achieving a 92 per cent "great" rating in bank service polls.

Savers can put away up to £300 each month into the account, allowing for a maximum total deposit of £3,600 over the 12-month term.

When fully utilised at the maximum monthly contribution, the account would generate approximately £137 in interest payments. The interest earned is paid out when the account reaches maturity rather than on a monthly basis.

One key restriction applies: customers cannot make any withdrawals until the fixed term concludes.

This structure is typical of regular savings products, which generally require consistent monthly deposits while limiting access to funds during the savings period.

The account operates on a fixed-rate basis, meaning the seven per cent return is guaranteed throughout the 12-month duration.

For those seeking to establish disciplined saving habits, this type of account provides a structured approach with a competitive return that currently leads the market.

New customers who switch to First Direct's 1st Account can also benefit from a £175 cash bonus.

To qualify for this incentive, applicants must never have held any product with First Direct previously, nor opened an HSBC current account since January 2018.

The switching process requires customers to open the account through the app, or online for joint accounts, and transfer an existing account from another bank within 45 days. This switch must include at least two direct debits or standing orders.

Additionally, new customers need to deposit a minimum of £1,000 and complete five or more debit card transactions within the same 45-day window.

Once all criteria are satisfied, the £175 bonus is credited by the 20th of the following month.

Beyond the savings account and switching bonus, many customers also gain access to a £250 interest-free overdraft, subject to credit approval.

Those weighing up their options may also wish to consider Nationwide's competing offer, which includes its own £175 switching bonus alongside a regular saver paying 6.5 per cent variable interest.

The Nationwide FlexDirect account permits monthly deposits of up to £200 into its linked regular saver, yielding a maximum of £84 in annual interest.

Current account holders also receive five per cent interest on balances up to £1,500 for the first year, potentially adding another £75, plus one per cent cashback for 12 months capped at £5 monthly when depositing at least £1,000.

Eligibility rules differ from First Direct's requirements: customers cannot have previously switched into a Nationwide account or received switch cash from the building society.

However, those who previously obtained a bonus through a sole account switch remain eligible when opening a joint account, and vice versa. The Nationwide bonus is paid within 10 days of meeting all qualifying conditions.