NatWest and RBS have become the latest savings providers to launch cash prizes for savers.
The banks have launched a new savings competition linked to their digital regular savings accounts, offering 10 lucky savers the chance to win £1,000.
The competition begins this month, but the winners won’t receive their prize until December – and you have to fulfil several caveats to be in the running.
Here, Which? looks at what you need to do to take part in the new competition, how the underlying regular savings account compares and round up alternative prize draws to consider.
How to take part in the savings competition
NatWest and RBS’s new competition is only for new savers, who must:
- Open a NatWest or RBS digital regular saver account by 5.30pm on 31 August 2021
- Set up a standing order between £1 and £50, and make payments in September, October and November.
So you just need to pay £1 by standing order in September, October and November to be eligible for one of the £1,000 prizes.
But what are your chances of actually winning? This will depend on how many other eligible savers open the account this month.
- Find out more: how to switch your savings account
What does the regular savings account offer?
The £1,000 prize competition is a new addition to NatWest and RBS’s digital regular saver accounts, which have been available for some time.
The first thing to note is that you must hold a NatWest or RBS current account before you can apply to open this regular saver.
The account pays 3.04% AER on balances from £1 to £1,000 and 0.01% AER on balances of more than £1,000.
As it’s aimed at helping people get into the habit of saving, you’re asked to set up a monthly standing order between £1 and £50. This amount can be changed or topped up whenever you like, as long as you don’t pay any more than £50 into the account each month.
Due to this restriction, you can pay in a maximum of £600 over the course of a year – but you won’t receive 3.04% AER interest on that total (which would be just over £18), as interest is paid monthly. Instead, after a year you’d earn £9.88 in interest.
- Find out more: what are the different types of savings account?
How does it compare with other regular savings accounts?
Regular savings accounts, or regular cash Isas, are accounts that often require you to deposit a certain amount each month.
These amounts are usually quite small, which is good for those who don’t have much to save but want to get into the habit of putting money away. However, they often come with a range of caveats and restrictions.
The table below shows the top-rate regular savings accounts.
|Account||AER||Payment requirements||Other terms|
|Bath Building Society 16-25 Regular Saver||4%||£10 minimum initial deposit. £10 to £50 regular monthly payments.||Only for those aged 16 to 25 who can prove that they live, work or study in Bath. Two withdrawals of up to £500 are allowed per calendar year.|
|NatWest / RBS Digital Regular Saver||3.04% on savings up to £1,000; 0.1% on savings over £1,000.||£1 to £50 regular monthly payments.||Must hold a NatWest or RBS current account.|
|Cambridge Building Society Loyalty Regular Saver||3%||£100 minimum initial deposit. £1 to £100 regular monthly payments.||Account has a one-year term. Can only be opened by customers who’ve held a Cambridge Building Society savings account or mortgage for at least 12 months. No withdrawals are allowed; early closure is subject to a 90 days’ interest penalty.|
|West Brom Building Society Adult’s Fixed-Rate Regular Saver||2%||£10 minimum initial deposit. £10 to £100 regular monthly payments.||Can only be opened and managed in branch. No withdrawals are allowed during its 12-month term.|
|Saffron Building Society Small Saver||1.75%||£1 to £50 regular monthly payments.||One withdrawal per calendar month is allowed during the account’s 12-month term.|
Source: Moneyfacts. Correct as of 10 August 2021, but rates are subject to change.
- Find out more: you can explore regular savings accounts using Which? Money Compare
How does it compare with other savings prize draws?
There are other options if you’re looking for accounts that come with prizes.
Nationwide Start to Save account
Like the NatWest account, this is also geared up for those looking to get into the savings habit of putting a little bit away every month.
It pays 1% AER, and you can pay in between £50 and £100 each month. The account has a 24-month term.
Prize draws are held quarterly, and you must save £50 to £100 in each of the three months leading up to the draw to be entered, where you can win up to £100.
Due to the account’s popularity, an extra prize draw on 24 January 2022 has recently been added. The prize fund is calculated at 1% of the total amount saved in all Start to Save accounts; in July 2021’s draw, 2,756 savers won £100.
Nationwide’s Member Prize Draw
You don’t have to take out a specific Nationwide account to be entered into its new monthly prize draw to win a share of £1m, with the top prize being £100,000.
Its Member Prize Draw includes members aged 18 or over who hold a current account, savings account or mortgage with the provider, and the first draw is in September. However, it’s only initially committed to holding them for 12 months.
Halifax and Bank of Scotland Savers Prize Draw
If you register for this monthly savings prize draw, those with at least £5,000 saved for a full calendar month in qualifying savings accounts with Halifax and Bank of Scotland stand to win a share of £550,000 worth of prizes.
The top prize is £100,000, but you can also win £1,000 or £100.
On average, 1,603 prizes are given out each month, but this varies depending on how many eligible entries are received.
NS&I premium bonds
Premium bonds are a savings product from National Savings & Investments (NS&I), which offer the chance of winning between £25 and £1m each month, instead of paying interest.
Each £1 you invest in premium bonds is given a unique number. All the numbers are put into a monthly draw to win tax-free cash prizes.
As it’s a lottery, there is a chance you could win nothing at all – and, as your savings won’t be earning any interest, they will effectively lose value over time due to inflation.
- Find out more: how to find the best savings account
Are the winnings tax-free?
If you’re lucky enough to win cash through a savings prize draw, this will be tax-free. However, any interest earned from that cash amount will count towards your personal savings allowance and may lead to a tax bill.
For instance, the NatWest and RBS £1,000 prizes are paid directly into winners’ regular digital saver accounts. This means the amount of interest you’ll receive from that account will increase.
For most people, this won’t be a problem. Basic-rate taxpayers have a personal savings allowance of £1,000 per tax year; for higher-rate taxpayers it’s £500. Additional-rate taxpayers, however, don’t receive any allowance at all.
- Find out more: the personal savings allowance explained