British households are being urged to check their savings pots, as new data reveals that switching to a high-interest regular saver account could earn them a significant £135 in free cash each year.
The Power of 7% Regular Savers
For those starting from scratch or saving consistently each month, a regular saver account is now being hailed as the best option. These accounts currently offer interest rates of up to a substantial 7.1%, allowing savers to potentially triple the interest earned compared to leaving money in an average, easy-access account.
The top-paying account is currently from Zopa, which offers a 7.1% rate on monthly deposits of up to £300. By committing to saving £300 every month into a regular saver with a 7% interest rate, a saver would earn approximately £135 in interest over the course of a year.
Why Your Current Account Isn't Enough
Moneyfacts spokesperson Caitlyn Eastell has issued a stark warning to savers, emphasising the impact of high inflation. "With inflation running high, it’s crucial to make sure your savings are working as hard as possible," she stated.
Eastell explained that money left in a standard savings account is likely losing value in real terms, as inflation erodes the typically low interest these accounts offer. "Putting your savings in the best paying account gives your cash a chance to grow and ease the cost of living pressures," she advised.
Understanding the Rules and the Rewards
While the rates are attractive, these accounts come with specific terms and conditions. According to Martin Lewis's Money Saving Expert team, regular savers often impose rigid rules, such as:
- Requiring a deposit every month.
- Capping the monthly amount you can save.
- Limiting the number of withdrawals you can make.
- Typically offering the high rate for only one year.
The experts also address a common point of confusion: the interest you earn is roughly half the advertised rate. This is not a con, but a result of the money being deposited monthly rather than as a single lump sum at the start of the year. Understanding this calculation is key to avoiding disappointment and maximising the returns from these powerful savings tools.
