Glossary · UK
What is Regular Saver Account?
A savings account that pays a higher rate of interest in exchange for committing to pay in a fixed amount (up to a set monthly cap) each month, usually over a 12-month term.
Full Definition
A regular saver account is a type of savings account designed to encourage a consistent saving habit by offering a notably higher interest rate than an easy-access account, in return for the saver committing to deposit a fixed sum -- often required to be between a minimum and a maximum, such as £25 to £300 -- into the account each month, usually for a fixed term of 12 months. Many of the most competitive regular saver rates are offered by banks and building societies to their existing current account customers, and the maximum monthly deposit cap means the very best headline rates typically apply to a relatively modest total balance, so the pounds-and-pence interest earned is often smaller than the advertised rate might suggest. Most regular saver accounts restrict or penalise withdrawals during the term -- some allow no withdrawals at all without closing the account and losing the bonus rate, while others permit a limited number of withdrawals before the rate drops. Missing a monthly payment can also mean forfeiting that month's top rate, or in some cases the account reverting to a lower standard variable rate for the rest of the term. Interest earned outside an ISA counts towards a saver's Personal Savings Allowance, so higher earners in particular should weigh a regular saver's attractive rate against the tax-free treatment offered by a cash ISA or a fixed-rate savings bond.