The savings market has certainly taken a battering in recent years and rates have been on a downward slide as a result. However, new research from Moneyfacts gives down-trodden savers a glimmer of hope, for it reveals that the average fixed regular savings account rate has risen by an eye-catching 0.10% in just the last six months.
The figures show that the average fixed regular savings account now pays 3.14% yearly, up from the 3.10% paid six months ago and putting it above the rate paid this time last year (2.94%). The average variable regular savings account has also seen an increase over the last six months, although this stood at a lesser 0.04% to bring the average to 1.68% yearly.
Considering the bleak outlook for the savings market this is positive news for savers, as Charlotte Nelson, finance expert at Moneyfacts, points out: "It's great news that regular savings accounts are seeing an improvement in rates, particularly as savers are currently struggling to get a decent return. These accounts are often overlooked as they require a monthly commitment; however, the fact is they pay far more than many other accounts on the market."
The potential for earning decent returns with one of these accounts should certainly not be dismissed lightly: by saving the maximum regular deposit in the best fixed rate regular savings account (paying 6.00% yearly) for one year, a saver could earn an attractive return of £119.17 in interest per year. This stands in stark contrast to the potential earnings of an easy access account - the best paying deal has a rate of just 1.45%, which would leave a saver with a return that was £90.77 smaller.
If you're saving to buy your own home, a Help to Buy: ISA, which is like a regular saver, can also beat other accounts hands-down. First-time buyers can invest up to £200 a month and achieve rates of up to 4.00% as well as benefit from a Government top up - a deal which is unparalleled in the ISA market.
However, Charlotte does go on to caution savers who are interested in regular savings accounts to check the terms carefully: "Some regular savings accounts can incur hefty penalties if the monthly contributions are not met or money is withdrawn," she warns. "Nevertheless, there are a number of flexible deals, which means there should be a regular savings account to meet every savings goal, be it for a holiday, a large purchase or the deposit for a first home."
If you're looking to get into the savings habit, or you want to simply try to maximise your returns, then it may be time to search out the top regular savings account deals. The ideal place to start is our best buys chart, so take a look and see if you can find an account that will help you to meet your savings goal.
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.
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