Are there any regular savings accounts that pay interest monthly?
I think Virgin Money offers one, but wondered if any other banks offer one. I have current accounts with Bank of Scotland, Lloyds, Nationwide, TSB, and Ulster Bank if that affects things.
There are very few regular savings accounts that offer monthly interest, mainly because the amount that you can save is usually quite restricted and therefore they are not designed to provide a regular interest that would be meaningful. For example, the Virgin Regular E-Saver Issue 6 has a maximum monthly deposit of just £250, so with a rate of 2.25% that would produce less than 50p gross interest in the first month!
With most regular savings accounts, there are also many terms and conditions that need to be met. NatWest’s Savings Builder has no maximum monthly premium and pays up to 1.5% as long as you deposit £100 or more each month. If you put in less, you’ll only earn 0.1% for that month. And this 1.5% rate drops to 1% gross when the balance reaches £5,001 (and you deposit at least £100 a month) and to 0.2% when the balance reaches £10,001 (and you deposit at least £100 a month). So once again, it’s not really an ideal vehicle to generate monthly interest and it’s jolly complicated.
You’d be better off with a more flexible easy access account, such as RCI Bank’s Freedom account, which pays 1.2% gross monthly income. Alternatively, please see the table below for details of the highest interest rates offered on traditional savings account that pay interest monthly. These may not pay as high an interest rate as a regular savings account, but because you can deposit a large amount you’ll get a higher monthly income payment.
The best savings accounts paying monthly interest
Anna Bowes is a founder and director at Savings Champion.