Monthly interest savings accounts allow you to take a regular income from your hard-saved cash.
If you rely on your savings to supplement your income, perhaps if you're retired, you really need to maximise the amount you're getting.
There are two key ways you can get a higher income from your savings:
You can pay in £5,640 into a cash ISA in the 2012-13 tax year. Cash ISAs pay you an income tax-free, so have a distinct advantage over normal savings accounts if you're a taxpayer.
Just take a look at the example below:
Banks and building societies automatically deduct 20% tax before paying you interest – so a gross rate of 3.00% actually becomes 2.40%. Higher rate taxpayers have to declare income on their tax return and pay an additional 20% to HM Revenue and Customs.
However, if you don't pay tax at all you can get your bank or building society to pay you all the interest by completing form R85.
Generally speaking, the longer you are willing to not have access to your money, the higher the interest rates you can achieve.
For instance, while the best easy access savings account that pays interest monthly (for a savings pot of £20,000) is priced at 2.75% AER (Saga Telephone Saver Issue 6 ), the top 5 year fixed rate bond pays 3.75% AER (Triodos Bank Five Year Ethical Savings Bond).
For a basic rate taxpayer with £20,000 in savings, the 5 year bond will pay an extra £13.73 per month or 38% more.
BM Savings 5 Year Fixed Rate ISA
View 5 year Fixed Rate ISAs
View 3 year Fixed Rate ISAs
Aldermore 2 Year Fixed Rate ISA
View 2 year Fixed Rate ISAs
View 1 year Fixed Rate ISAs
You may be eligible to pay no tax, or the starting rate of tax on your savings income. Find out whether you qualify.
Triodos Bank Triodos Five Year Ethical Savings Bond
Non Taxpayer £62.50 Basic Rate Taxpayer £50.00
View the best 5 year Fixed Rate Bonds
Non Taxpayer £57.50 Basic Rate Taxpayer £46.00
View the best 4 year Fixed Rate Bonds
View the best 3 year Fixed Rate Bonds
Non Taxpayer £51.83 Basic Rate Taxpayer £41.47
See the best 2 year Fixed Rate Bonds
Non Taxpayer £50.17 Basic Rate Taxpayer £40.13
See the best 1 year Fixed Rate Bonds
Non Taxpayer £51.00 Basic Rate Taxpayer £40.80
Find the best Notice Savings Accounts
Non Taxpayer £45.33 Basic Rate Taxpayer £36.27
See the best Easy Access Savings Accounts
Find all savings accounts and cash ISAs Compare variable monthly interest savings accounts Find the best savings accounts online today
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.