A Regular Savings Accounts requires you to deposit a sum of money each month without a fail, so they’re best suited for those who are just starting to save for the first time or those who wish to save a specified amount of money each month in a disciplined way. Requirements vary from bank to bank, but you’ll usually need to pay in at least £25 and not more than £500 per month. You’ll also have to commit to making these regular payments for an agreed period, typically 12 months. Read our article on the best Regular Saving Accounts on the market.
Regular savings typically have a limit on the number of cash withdrawals you can make each year therefore, it is not ideal account for emergence saving. Regular Saving Accounts also have strict terms and conditions. You may be penalised if you miss a month’s deposit. In addition, a Regular Savings Account is likely to restrict you from investing more than a certain sum each month, preventing you from depositing extra cash in your account whenever you want.
• Attractive interest rates. Rates can be as high as 5% per year.
• Low minimum monthly payments.
• Helps you save a specified amount of money each month in a disciplined way.
• Inflexible as you’ll usually have to pay in money regularly to the account.
• Unsuitable if you need emergency access to your money.
Why choose a Regular Savings Account?
If you have a steady source of income and can afford the fixed monthly payments it can be a great way to build up your savings reasonably fast. Regular savers can also be a good fit if you want to save up for a specific goal and don’t mind giving up some flexibility in exchange for a higher return