Regular Savings Accounts

Regular savings accounts offer some of the highest rates of interest available. But there are restrictions on regular savings accounts that limit how you may benefit from these attractive rates. As you might guess from the name, you will be required to make regular contributions, usually on a monthly basis.

Regular savings accounts' providers may stipulate maximum (and in some cases minimum) limits on how much you may save, £250 or £500 are common. There may be other restrictions as well, including, for example, a requirement to have a current account with the regular savings account provider.

Many regular savings accounts also have a limited life span - often just one year - thus limiting the overall maximum amount you may save. The key fact about regular savings accounts is that you must save regularly to qualify for the high interest rate on offer. Some accounts allow you to miss one or a small number of payments but if you miss more then the interest rate paid on your savings will be reduced.

You may find that regular savings accounts also put conditions on withdrawals - your access to the funds may be limited to one or even no withdrawals during the year the account runs - or you may be offered 'bonus' interest provided you make no withdrawals.

Last Updated: April 2008 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.