The Co-operative Bank has launched a new regular savings account offering a competitive seven per cent interest rate
Regular savings accounts are among the few products still offering returns significantly higher than the current base rate.
The account requires savers to be UK residents aged 16 and over and hold an existing Co-op Bank current account.
For joint applications, only one applicant needs a current account to qualify. Savers can open The Co-operative Bank's Regular Saver (Issue 1) with just £1, making it accessible to those looking to start building their savings with minimal initial investment.
The account allows savers to deposit up to £250 per month, with a maximum total investment of £3,000 throughout the 12-month term.
Interest is paid after 12 months when the account reaches maturity
GETTYBased on the current interest rate, a full £3,000 deposit is estimated to earn £114.21 over 12 months, bringing the total balance to £3,114.21 when the account matures.
Interest is paid after 12 months when the account reaches maturity. Unlike typical regular savings accounts that restrict access to funds, The Co-operative Bank's offering provides greater flexibility by allowing withdrawals at any time without penalty.
Regular savings accounts typically require people to deposit a set amount each month and make minimal to no withdrawals.
They work well for disciplined savers who want to build their savings over time, benefitting from higher interest rates than standard accounts.
The Co-operative Bank has launched a new regular savings account paying seven per cent today PAThis could be a great option for savers following the Bank of England's recent decision to reduce the base rate to 4.25 per cent this month.
Principality Building Society currently tops the market for regular savers with an Annual Equivalent Rate of 7.5 per cent, though the account runs for just six months with interest paid on maturity.
Savers can deposit up to £200 per month, allowing the pot to grow to a maximum of £1,200, with withdrawals not permitted until the account matures. With maximum monthly investments of £200, savers will end up with £1,227.53, including £27.53 in interest.
First Direct matches The Co-operative Bank's seven per cent AER over 12 months but allows higher monthly deposits of £300, totalling up to £3,600 in savings over the year.
At the end of the term, savers will have £3,736.50, including £136.50 in interest, making it potentially better for amassing larger savings despite the lower rate.
Other competitive options in the regular savings market include Virgin Money with a 6.5 per cent AER. Lloyds Bank provides a 6.25 per cent AER on its Club Lloyds account.
Regular savings accounts remain among the only products offering returns much higher than the current 4.25 per cent base rate
PA/GETTYThese accounts cater to disciplined savers seeking higher returns than standard savings products.
While interest rates have been dropping in recent weeks following the Bank of England's decision to reduce the base rate, regular savings accounts remain among the only products offering returns much higher than the current 4.25 per cent base rate.
The variety of terms and deposit limits across providers allows savers to choose accounts that best match their monthly saving capacity and investment timeline preferences.
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