New savings account paying 7.5% launches today - pros and cons explained
Skipton Building Society has today launched a new Regular Saver with a top-paying rate of 7.5%.
Regular savings accounts are typically for people who are looking to save a small amount of money each month.
The new Member Regular Saver allows you to put away up to £250 a month, with no minimum deposit and the option to skip a month if needed.
The 7.5% rate is fixed for one year, meaning you could potentially save up to £3,000 over 12 months and gain interest of £121.
But this account is only available if you already have another product with Skipton that was opened before May 31, 2023.
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You should also keep in mind that you won’t be able to withdraw your money during the 12 month period where the account is open.
However, you can choose to close your account early without incurring a penalty, and withdraw the full amount.
Skipton is now offering the top-paying rate for a regular savings account in the UK, with First Direct in second place with 7% fixed for a year.
However, it is possible earn more interest with First Direct.
First Direct allows you to save slightly more each month at £300 - meaning the maximum balance you would have after 12 months is £3,600.
This would mean savers will get up to £135 back in interest if they max out the account.
The downsides to First Direct is you have to pay in at least £25 and you’re not allowed to skip a month.
Lloyds Bank offers a regular saver account with a rate of 6.25% and an even higher maximum monthly pay-in of £400.
This means if you max out the account, you would have saved up £4,800 and gained interest of £161.
You may also get more for your money by using an easy-access account, if you have a lump sum to put away and don't need to save little and often.
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The top-paying easy-access account right now is from Hanley Economic Building Society and pays 4.5%, although this rate is variable.
If you were to save £5,000 in one lump sum - and the rate does not dip below 4.5% - you would get at least £225 back in interest after one year.
Skipton has today warned that savers are missing out on billions in lost interest by keeping cash in low-interest accounts.
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Maitham Mohsin, Head of Savings at Skipton Building Society, said: “With billions of pounds just left in accounts paying virtually no interest, it’s so important that Brits act now, grab their money by the scruff of its neck, and start making their money work hard for them.
“Being a member matters, and so our new regular saver gives more than a million people the opportunity to make their money work harder than it can in other accounts, but we also pride ourselves on giving above-market value across all our savings accounts.”
Andrew Bottomley, CEO of Money at Skipton Building Society, said: “The launch of our new regular saver is part of that, as are the other great benefits all of our 1.1 million members can access, but there is more to come as we work hard to reinvest our success and give even more value back to our members.”
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