The first step to making the most of these accounts is finding one that meets your needs. While many come with hefty restrictions, there are a few that are a bit more lenient in terms of accessibility and deposit requirements – a growing number are allowing withdrawals, and not all will penalise you for missed payments – so make sure to look at the small print before opening the account.
One of the most important decisions you’ll need to make is whether you want a fixed or variable rate deal. Fixed rates tend to come with more restrictions for the trade-off of a better rate, while with variable deals there’s the chance that the rate could change over the term of the account, so there’s no guarantee how much you’ll be left with.
There are a growing number of regular saver accounts with 12-month terms, which could be ideal for those saving up for a specific purchase in a year’s time. If you’ve got more long-term goals, such as saving for retirement or your child’s university fees, you may want to look at variable rate deals with no fixed term, which could allow you to benefit from compound interest over the years.
You may also want to speak to your current banking provider to see if you can secure even better deals – many banks offer loyalty-based regular saver accounts that are exclusive to current banking customers, and the rates on offer tend to be far higher than those offered to the masses. In this instance, loyalty can definitely pay, as you’ll often be able to find the best accounts by sticking with your bank, but that doesn’t mean it’s the only option.
Indeed, you can have as many regular saver accounts as you wish, but you need to be confident that you can meet the requirements of each. Bear in mind that, if you have enough savings to split between several monthly savings accounts, it may be worth looking to fixed rate bonds instead, as investing a lump sum means you’ll be able to benefit more from the power of compounding.