Regular Savings Account
Regular savings accounts are a fantastic way of saving a small amount of money on a regular basis, and can pay well in a difficult market.
Money is often locked in for a 12 month term, and you are expected to pay a fixed amount in each month during this period, and a fixed interest rate payment will be made at the end of the year. Money is not usually accessible during this time.
The great thing about these accounts is that by taking a little bit each month, the average saver will not notice the money being taken so much, but will still end up with a lump sum at the end of the year.
Rates of these accounts are also usually extremely favourable compared with a standard easy access account as the bank or building society providing the account know you are going to have to leave your money in the account for at least a year.
Despite a Bank of England base rate of just 0.5%, some accounts paying as much as 6 or 7% interest have cropped up, a big difference from the 2.5% common from a standard easy access account.
The only problem with these accounts is that the amount of money you can pay in is usually very limited, typically between £250-£300 a month.
Be careful to read the fine print before taking out one of these accounts as withdrawals midterm are usually not allowed, as is changing the amount you pay each month.