Whilst most of us still haven't got our heads around the fact that Christmas 2012 is only a month away, some savvy savers are looking ahead to Christmas 2013!
Regular savings accounts can be a good way to plan ahead whilst achieving a competitive rate of return.
Perceived as a rather niche method of investing, regular savings can reap huge rewards.
Here are some tips on how to get the most out of a regular savings deal:
Regular savings accounts basically do what they say on the tin.
Requiring a set deposit to be paid in, usually each month, these accounts will often pay a healthy rate in return.
The regular deposit amount is agreed with the provider upon opening the account, although some providers will allow the contribution amount to be changed at their discretion.
It is important to remember that interest paid will be around half of that advertised for the account. This is due to the fact that the money is being saved on a monthly basis, rather than all at once.
This is no doubt that regular savings pay some of the highest rates in the market; however, it can be frustrating having to build up funds to achieve a decent return.
A canny method of saving, known as 'drip-feeding' can help achieve the most from your regular savings account.
This involves placing a lump sum of money in a 'normal' high paying account, then moving the funds across to the regular savings deal to meet the regular deposit requirement.
Not all accounts allow drip-feeding, however, so check with your provider prior to committing to an account.
Some regular savings accounts allow you to amend the regular contribution, with a select few rewarding higher interest if you increase your monthly investment.
For example, the Regular Savings Account from Nationwide Building Society pays 0.10% for deposits between £1 and £99. If you increase the monthly deposit to between £100 and £199 will boost the return to 1.35%, between £200 and £499 will increase the rate to 1.85%, whilst even higher deposits ranging from £500 to £1,000 will result in a return of 2.50%.
Regular savings accounts are known to carry strict terms and conditions relating not only to how often a regular deposit must be paid in, but also withdrawing cash.
When it comes to accessing your money, the majority of these accounts will have restrictions on how many times you can make withdrawals per year.
Penalties, such as loss of interest, will often apply if you fail to meet the terms of the account.
When searching for a regular savings account always check out the terms and conditions to assess whether it meets your requirements.
If your money is invested in a UK-based bank or building society it will be protected under the Financial Services Compensation Scheme (FSCS) up to the value of £85,000 per person, per institution.
If your funds exceed this amount, it is wise to spread your funds about in various high return accounts.
Again, always check before committing to an account to be sure you are happy with all aspects of the deal and the provider.
Compare Regular Savings Accounts - Find the best regular savings accounts that you pay into monthly with our independent best buy table and whole market search.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.