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Building society offers 'excellent' 5.5% interest on limited edition account

Daily Express logo Daily Express 25/11/2022 Katie Elliott
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The current economic climate is shaping up much better for savers, as banks and building societies have been offering some of the highest rates of interest seen in over a decade to reflect the Bank of England's Base Rate hikes. Monmouthshire Building Society is currently topping the regular savings leaderboard with its one-year regular account.

Regular savings accounts are viewed as a good option for those looking to start building up a savings pot. These accounts typically offer some of the highest interest rates on the market and the terms generally encourage savers to deposit cash into the accounts monthly.

Savers simply have to meet certain requirements on the respective accounts and they'll earn interest on their savings, mainly on the basis they make minimal withdrawals and deposit regularly.

Monmouthshire BS' Christmas Saver Bond (Issue 5) is currently offering a one-year fixed bond with a 5.5 percent Annual Equivalent Rate (AER).

A minimum deposit of £10 is required to open the account and up to £2,400 can be invested over the course of the year.

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Piggy bank, person online banking © GETTY Piggy bank, person online banking

The account allows up to £200 to be deposited per calendar month and withdrawals are not permitted until October 1, 2023. If the account is closed before this date, it will not qualify for the 5.5 percent AER and instead, will earn interest calculated at 0.2 percent AER.

The fixed term starts on the date the account is opened and interest is calculated on a daily basis on the balance in the account and paid on maturity.

It must also be noted that as this is a limited-issue bond it can be withdrawn by the Society without notice at any time. The account is available to UK residents, excluding Northern Ireland, aged 16 or over.

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Person online banking © GETTY Person online banking

Kevin Mountford, savings expert and co-founder at Raisin commented: "At Christmas time, we face a period of increased costs, which for many is a real challenge and adds a lot of pressure to households around the country. Clearly, if we are able to save towards this it provides a big help but due to the current cost of living putting money aside isn't easy. However, products such as the new Monmouthshire Christmas Bond help as it provides a degree of flexibility in terms of the amount that can be deposited.

"Whilst this product is marketed as a Christmas fixed bond, it operates as a typical regular saver account enabling savers to deposit a monthly amount starting at £10 and at 5.5 percent, it also offers an excellent rate of interest.

"It should be noted that any early closure of the account means that you will lose out on the headline rate and instead default to a derisory 0.2 percent, so make sure you can afford to lock the money away until the end of 2023. But, this can be a positive as it provides a more disciplined approach to saving and to be fair, there are no restrictions on how the money can be used and upon maturity, you could just decide to take a winter break or spend on anything else that is needed.

"The only real downside is the fact that the product can only be opened in branch or via a postal application so always worth checking out other options and be aware that this product could be withdrawn at any time. So if it appeals, make sure you act now and don't miss out."

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While this account currently offers the highest returns available for a regular savings account, competition isn't too far behind.

Lloyds, Natwest, and the Royal Bank of Scotland are each offering attractive rates exceeding five percent on their respective regular savings account.

Lloyds Bank's Club Lloyds Monthly Saver is offering an AER of 5.25 percent.

A £25 deposit is required to open this account and the term runs for 12 months, which means up to £4,800 can be invested over the course of the year.

The account is available to Club Lloyds customers and unlimited withdrawals are permitted without penalty. The interest rate is fixed and will be paid on the anniversary of the account opening, and deposits between £25 and £400 must be invested before the 25th of every month.

NatWest's Digital Regular Saver falls just behind with an AER of 5.12 percent.

The 5.12 percent interest rate is awarded to savings up to £1,000, after which a one percent and 0.5 percent will be awarded to figures from £1,001 to £5,000, and £5,001 and over, respectively.

There is no minimum deposit required to open the account and it allows people to save up to £150 each month. Unlimited withdrawals are also permitted without penalty and interest is awarded monthly.

Royal Bank of Scotland's Digital Regular Saver is also offering an AER of 5.12 percent.

Like NatWest, the same interest rules apply to this bank account (5.12 percent paid up to £1,000, then one percent and 0.5 percent), interest is applied monthly, and unlimited withdrawals are also permitted.

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