Advertisement

Why should I save into a monthly interest savings account?

If you would like to receive a regular income from your savings then an account that pays monthly interest does exactly that. Most accounts offer to either have your interest kept in the account (where it then benefits from compound interest) or to have it paid into a separate account.

Advertisement

Best rates - monthly interest accounts

  • Aldermore Logo
    Aldermore 5 Year Fixed Rate Account FSCS logo
    FSCS logo
    AER
    2.25%
    Account Type
    Fixed
    Notice / Term
    5 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.23% paid at £1K
    AER 2.25% paid at £1K
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be reinvested in a further Fixed Rate/Fixed Term account on equivalent/similar terms

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • Paragon Bank Logo
    Paragon Bank 5 Year Fixed Rate Savings Account FSCS logo
    FSCS logo
    AER
    2.25%
    Account Type
    Fixed
    Notice / Term
    5 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.23% paid at £1K
    AER 2.25% paid at £1K
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £500,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • RCI Bank UK Logo
    RCI Bank UK Fixed Term Savings Account FSCS logo
    FSCS logo
    AER
    2.15%
    Account Type
    Fixed
    Notice / Term
    5 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.13% paid at £1K
    AER 2.15% paid at £1K
    Interest Paid Monthly
    Interest payment Interest must be compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • Paragon Bank Logo
    Paragon Bank 3 Year Fixed Rate Savings Account FSCS logo
    FSCS logo
    AER
    2.10%
    Account Type
    Fixed
    Notice / Term
    3 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.08% paid at £1K
    AER 2.10% paid at £1K
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £500,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • RCI Bank UK Logo
    RCI Bank UK Fixed Term Savings Account FSCS logo
    FSCS logo
    AER
    2.05%
    Account Type
    Fixed
    Notice / Term
    4 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.03% paid at £1K
    AER 2.05% paid at £1K
    Interest Paid Monthly
    Interest payment Interest must be compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • Aldermore Logo
    Aldermore 4 Year Fixed Rate Account FSCS logo
    FSCS logo
    AER
    2.00%
    Account Type
    Fixed
    Notice / Term
    4 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.98% paid at £1K
    AER 2.00% paid at £1K
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be reinvested in a further Fixed Rate/Fixed Term account on equivalent/similar terms

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • Paragon Bank Logo
    Paragon Bank 5 Year Fixed Rate Cash ISA FSCS logo
    FSCS logo
    AER
    1.95%
    Account Type
    Cash ISA
    Notice / Term
    5 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    ISA Information
    Additional Information

    Rates

    Rate 1.93% paid at £500
    AER 1.95% paid at £500
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £500
    Max Investment £0
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    Earlier access subject to 365 day loss of interest.
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid tax free

    Opening Restrictions

    N/A

    ISA Information

    Transfers In - Cash ISAs
    Transfers In - Stocks & Shares ISAs
    Transfers In - Help to Buy ISAs
    Additional Permitted Subscription ISA
    Transfer Notes -
    Flexible Rules Apply
    Split ISA Allowance Between Different ISAs With Same Provider

    Additional Information

    N/A
  • Paragon Bank Logo
    Paragon Bank 2 Year Fixed Rate Savings Account FSCS logo
    FSCS logo
    AER
    1.95%
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.93% paid at £1K
    AER 1.95% paid at £1K
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £500,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • RCI Bank UK Logo
    RCI Bank UK Fixed Term Savings Account FSCS logo
    FSCS logo
    AER
    1.95%
    Account Type
    Fixed
    Notice / Term
    3 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.93% paid at £1K
    AER 1.95% paid at £1K
    Interest Paid Monthly
    Interest payment Interest must be compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • Aldermore Logo
    Aldermore 3 Year Fixed Rate Account FSCS logo
    FSCS logo
    AER
    1.90%
    Account Type
    Fixed
    Notice / Term
    3 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.88% paid at £1K
    AER 1.90% paid at £1K
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be reinvested in a further Fixed Rate/Fixed Term account on equivalent/similar terms

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A

Select a Savings Account

Note

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution.

Disclaimer

All rates subject to change without notice. Please check all rates and terms before investing or borrowing

Quick Links

Quick links are where we have an arrangement with a provider so you can move directly from our site to theirs to view more information and apply for a product. We also use quick links where we have an arrangement with a preferred broker to move you directly to their site. Depending on the arrangement we may receive a modest commission either when you press a 'Go to Provider' or 'Speak to an Adviser' button, when you call an advertised number or when you complete an application.

Get our weekly newsletter

Weekend Moneyfacts is available free by email to all Moneyfacts.co.uk users.

Please send me Weekend Moneyfacts, Savers Friend and selected third-party offers.

How Moneyfacts works

  • blue money scales

    BALANCED. Moneyfacts.co.uk is entirely independent and authorised by the Financial Conduct Authority.

  • free label

    FREE. There is no cost to you. Our service is entirely free and you don't need to share any personal data to access our comparison tables.

  • drawing of pound sign and arrow

    TRANSPARENT. We only receive payment from product providers and intermediaries for quick/direct links and adverts through to their websites.

  • blue binoculars

    COMPREHENSIVE. We research the whole market and scour the small print so you can find the best products for your needs.

Top monthly interest account guides

guide icon
What type of savings account do I need?

This guide tells you about the range of standard ISA and savings accounts available.

Read More
guide icon
Saving for your first home

Our top tips to help you save for your first home.

Read More
guide icon
How to start saving an emergency fund

This guide has a range of tips to help you get started and maintain your emergency savings fund.

Read More
guide icon
What is the Personal Savings Allowance?

Find out more about the Personal Savings Allowance.

Read More

Monthly Interest Accounts Guide

Leanne Macardle

Leanne Macardle

Editor

At a glance

  • A monthly interest savings account pays you interest on a monthly basis, which can be paid into another account or added to the savings within the account depending on the terms of the account.
  • There are a number of savings accounts that pay monthly interest, these include easy access accounts, cash ISAs, fixed rate ISAs, notice accounts, fixed rate bonds, Help to Buy ISAs and offshore savings.
  • Normally the best rates are on fixed rate bonds, but these usually don’t allow you to withdraw your money before the end of the fixed period.

Lots of different types of savings accounts pay interest monthly; including Fixed Rate Bonds, Easy Access, Notice and Cash ISAs. As well as this, other accounts may also pay monthly interest so it is important to check in the account details to see when interest will be paid. Monthly interest savings allow you to earn interest on your savings that can then be paid either to you as an income or added to your savings balance. Taking interest as an income is particularly appealing to those with large savings in a fixed-rate account, as it would provide them monthly payments from the account without incurring a penalty that they may otherwise get for withdrawing money.

How do monthly interest savings accounts work?

Earning monthly interest on your savings means exactly that. Each month the interest is calculated on your balance and then the interest is paid either directly to you or added to the balance. You will find a range of account types that offer monthly interest and a choice of fixed and variable rates. If you want to save tax-free then you may want to open or transfer to a cash ISA paying monthly interest.

Which savings accounts pay monthly interest?

Not all savings accounts and cash ISAs offer the option to pay you monthly interest so it is important that you check the account’s information to ensure that the one you choose allows this. You can earn monthly interest on:

  • Easy access accounts
  • Cash ISAs
  • Fixed-rate ISAs
  • Notice accounts
  • Fixed rate bonds
  • Help to Buy ISAs (these are for first time buyers only)
  • Offshore savings

What should I check before opening an account paying monthly interest?

Before opening the account make sure you are happy with the terms of the account and the ways you will be able to manage the account. As well as this, some monthly interest accounts may only allow the interest to be paid to a separate account so watch out for this.

Can I have my interest paid into a different account?

Some accounts will let you choose to pay your interest into an account held at a different bank or Building Society, you will need to check the account details to ensure that the account you are considering allows this.

What are the differences between monthly interest and annual interest savings options?

Sometimes interest rates for the monthly interest option may differ to that of annual option and, again, always make sure you check the account details to see if there is a difference and what this will be. Also keep in mind that monthly interest allows you to earn your interest more frequently than annual interest options, but this will result in not getting the lump sum of interest that you would on annual accounts.

Will savings tax be different between monthly and annual interest options?

No both options have the same rules for savings tax.

Where are the best monthly interest savings accounts?

The best monthly interesting savings accounts are constantly changing as saving providers bring out new products and change rates. As well as this the best account for you will depend on your personal circumstances and not just on the best rate available, for example some accounts will require a high minimum deposit while others might not allow further deposits made to the account once it has been opened.

Pros and cons of monthly interest accounts

  • Monthly interest can be moved into another account which can provide you with access to some money from a fixed-rate savings account
  • A wide range of savings providers offer monthly interest accounts making it easier for savers to find a competitive rate
  • The interest gained monthly might be lower than that gained annually on the same account

Moneyfacts tip

Moneyfacts tip Leanne Macardle

If you think you will need to make withdrawals from your savings accounts makes sure you check what the account’s withdrawal terms are as some may not allow withdrawals or charge a penalty to do so.

Cookies

Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy