Last week saw First Direct and HSBC almost halve the interest rates on their market-leading regular savings accounts, from 5% to 2.75% AER.
While the long-standing accounts came with caveats, such as having to hold a current account, they were one of the few ways to access an inflation-busting interest rate without locking away cash for several years.
Anyone who had already opened the accounts will continue to get the original interest rate until their account's 12-month term is up.
But for other savers, M&S Bank remains the onlybank to offer 5% AER on its regular saver. But is it the best option for your money?
Which? reveals the best rates for regular savers, and some alternative homes for your cash.
The table below shows the top five regular savings accounts, organised by interest rate.
|M&S Bank Monthly Saver||5%||Save £25-£250 per month; must have an M&S current account; not available to residents of the Channel Islands or Isle of Man; any early withdrawals will mean closing your account.|
|Kent Reliance 1 Year Regular Savings Account||3%||Save £50-£500 per month; not available online; unlimited withdrawals.|
|Virgin Money Regular Saver||3%||Save £1-£250 per month; not available online; unlimited withdrawals.|
|Saffron Building Society 12 Month Fixed Rate Regular Saver||3%||Save £10-£250 per month; not available online; unlimited withdrawals.|
|Ipswich Building Society Smart Save Monthly||2.9%||Save £10-£500 per month; only available to residents of certain postcodes; only allowed two withdrawals a year.|
Source: Moneyfacts. Correct 10 October 2019, rates are subject to change.
Some of these accounts seem to be from a bygone era; many aren't available online, or offered nationwide. But this is good news for those who don't like online banking.
The interest rate only lasts for a year, and drops if you fail to deposit at least the minimum amount each month, or make unauthorised withdrawals.
Only three accounts allow unlimited withdrawals, whereas some allow just a couple a year and others don't allow any.
Many banks used to offer their current account customers exclusive accounts and special rates, in a bid to stop them moving elsewhere.
Most of the big banks still offer exclusive accounts to existing customers, but the deals aren't always great.
For instance NatWest's Instant Saver Account is only available to current account holders, and pays just 0.2% AER on balances up to £24,999. That's 1.44% less than the current top rate.
Similarly, Santander 123 World members can get better rates on things like its fixed-term bonds. Whereas most people get 0.7% AER for one year, 123 World members can get 0.8% AER for two years. Yet the current top rate two-year account in the market pays 2.32%.
At the smaller end of the market, Darlington Building Society offers a 45-day notice account exclusively to members who have held an account for at least three consecutive years. But with a rate of 1.4%, you could do just as well with an instant-access account.
With loyalty no longer paying, you might want to consider moving your money elsewhere.
Instant-access rates aren't as high as the most competitive regular savers.
However, if you've got a large lump sum you want to save, you could actually earn more interest over the year. This is because you can deposit all your money in the account at the start of the year, so it's earning interest from day one.
Regular saver accounts require you to regularly deposit smaller amounts, so you effectively earn half the interest advertised.
The three top-rate accounts across instant-access cash Isas and savings accounts are:
Unfortunately, many top-rate accounts only enable a certain number of withdrawals per year without facing a penalty. Others include bonus rates, meaning the AER may drop significantly after the first 12 months.
Some current accounts pay high interest rates for those who fulfil their caveats - you'll often have to pay in a certain amount of money each month, and sometimes set up a certain number of direct debits - in essence 'proving' you're going to use it as your main current account.
The top rates are:
Don't just think about interest rates when it comes to your savings.
Although their savings accounts don't top the tables, HSBC, NatWest and RBS all offer generous bonuses to new customers who switch to their current accounts.
This essentially means you'll need to earn at least £21,000 a year after tax to be eligible. You have to switch using the Current Account Switching Service (CASS), and also pay at least two direct debits or standing orders from the account.
There's more of a delay on getting the cash here, as you have to pay in at least £1,500 by 24 January 2020, and will then receive the bonus some time before 21 February 2020.
Although these minimum payment might seem high, they're nowhere near as much as you'd need to generate the same amount in savings interest with, say, the top-rate instant-access account.
In fact, even at the top rate of 1.46%, you'd need to save £11,980 to get £175 interest, or £10,275 to generate £150. This would also be over the course of a year, and would mean you couldn't let the balance drop below this amount over that time.
And there's nothing stopping you getting your salary paid into your current account, then moving that money into a savings account.
Unlike some instant-access accounts, notice accounts offer unlimited withdrawals. The only catch is, you'll have to wait a certain number of days until you receive the cash.
The most common notice periods are 30, 60 and 90 days, but accounts can range from seven days to a whole year.
The top rates for the most common notice terms are:
Although there are several providers offering regular savers Isas, the best-paying accounts aren't available nationwide:
Editor's note: This article has been updated to reflect that withdrawals are permitted with the Virgin Money Regular Saver account.
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Money Compare is a trading name of Which? Financial Services Limited.