Research by Moneyfacts.co.uk reveals that savvy savers who use regular savings accounts for their short-term savings goals are reaping the rewards, earning more interest than with any other standard savings account.

Savings rates have been obliterated in recent years, but regular savers have remained relatively unscathed; Best Buy deals have stayed on top for the last two years and average rates have resisted a dramatic downward spiral.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, comments:

“Regular savings accounts continue to offer great returns for downtrodden savers, paying more than any other standard savings account on the market, including long-term fixed bonds.

“These deals have previously fallen out of favour due to their restrictive nature, but in recent years more flexible accounts have been launched onto the market, with many now allowing more money to be invested. For example, Kent Reliance’s regular savings account, paying a top rate of 4% variable, now allows savers to put away a yearly total of £6,000 as well as make unlimited withdrawals.

“While the best rates (of up to 6%) are reserved for customers who take out a linked current account*, those who don’t wish to switch their main bank account will still find rates of up to 4% on offer. This means that they could open a high interest current account with another provider and still have the opportunity to invest in a competitive regular saver, boosting their returns considerably.

“First-time buyers who are waiting for the Help to Buy ISA to launch in December could also take advantage of competitive deals: using a regular saver can enable them to kick-start their savings now to avoid the temptation to spend money that could be earning interest.

“Regular savings accounts could rescue people who need to put money aside for various reasons, be it a deposit for a home, education fees, holidays or large purchases. These accounts encourage the savings habit, and with careful planning, savers can reach their savings goals quicker than expected.”

*Regular savings accounts in the above table include those that are tied to a current account. See the attached table for additional information and other savings deals.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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