An interest rate of six per cent may sound too good to be true in today's rock-bottom savings environment.
But savers searching for the best returns on cash deposits must look to current account providers, not just for competitiveinterest-paying current accounts, but also to access bolt-on regular saver products with higher rates.
Banks are using these products to lure in new current account customers. As Andrew Haggar, of website Moneycomms, points out: 'Linked savings are proving popular among those who are looking to save regularly with First Direct, M&S Bank and HSBC (selected accounts) paying 6 per cent - that's four times as much as you'll get on a best-buy instant access account.'
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Nest egg: How to grow your cash with the best regular saver deals
It’s easy to get sucked into the rate – but you have to remember you only earn interest on the accumulated balance each month, and typically there are limits on how much you can stash away and on withdrawals.
This is Money has put together a round-up of the best available deals.
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The best regular saver accounts
M&S Bank recently launched a monthly savings account, which offers a headline grabbing 6 per cent interest bolted-on to its fee-free current account.
REGULAR SAVERS: WHAT YOU NEED TO KNOW
Often these accounts only last a year, and there are strict limits on the amount you can save.
Banks often use them as advertising tools, promising eye-catching interest rates, to reel in new customers.
Play the banks at their own game, however, and for those putting money aside every month they can pay off nicely.
- Once a regular saver's limited life ends, your cash sweeps into an ordinary account so you need to keep your wits about you you and switch to a new account with better rates.
- Remember to make a note of the date you opened the account so you know when to change.
- Interest rate-wise, regular savers can be unbeatable, but remember they are subject to tax so factor that in when comparing them to best cash Isa rates
- If you want to put more than £500 aside monthly, you could think about opening up more than one regular savings account.
A good strategy if a regular saver beats all other rates, including Isas, is to fill it over the fixed period of say a year and then move the money into a cash Isa at the end of the period, making sure you use your Isa allowance every year.
Customers will be able to save £250 a month into the regular saver account, earning a maximum of £97 interest, before tax, over a 12-month period.
It already offers the account to premium current account customers who pay a monthly fee of £10.
M&S Bank – which is owned by HSBC - launched its free current account offering in May last year, as it looked to attract new customers.
As well as access to its regular savings account, perks include free withdrawals abroad, a £100 M&S gift card and rewards points.
The First Direct Regular Saver is similar. It too offers a 6 per cent interest rate for regular deposits over a year from customers with itsFirst Account.
(New customers will be paid £100 to open the current account - which already puts them in a better position financially than any of the savings accounts currently available.)
The regular saver allows deposits between £25 and £300 each month and does not allow any withdrawals.
If you saved £300 per month for 12 months, you'd receive returns of approximately £117 gross (£93 net).
The HSBC Regular Saver pays out 4 per cent if you have the normal bank account or graduate account with the bank.
These accounts are fee-free, but you have to pay in at least £500 a month. You can from deposit £25 to £250 a month into the regular saver, up to a maximum of £3,000 a year. You are allowed to miss deposits.
The maximum balance increases monthly by £250, which means if you deposit £50 in month one, you could add £450 in month two.
If you have one HSBC's Advance Account you'll be eligible for a 6 per cent regular saver. But to be eligible for the account you'll need to pay in a minimum of £1,750 monthly.
The Club Lloyds Monthly Saver pays 4 per cent if you have the normalClub Lloyds Bank Account,which is a free account, as long as you pay in at least £1,500 a month.
You can deposit £25 - £400 a month into the Monthly Saver, up to a maximum of £4,800 a year.You're allowed to miss deposits, though you can't make them up in subsequent months if you have missed any.
This account also allows you to make unlimited withdrawals, but if you do take cash out, you can't add money to the account to replace it.
Current Accounts Of The Week
Better savings deals: Think outside the box to make the most of your money
Regular savers open to anyone
There are a few regular savings accounts that anyone can take out - even if you're not a customer of the bank or building society.But they tend to be branch-only deals, which means the provider needs to be local to you.
The Saffron BS 12 month fixed-rate regular saver (issue 2) pays 4 per cent and lets you save between £10 and £200 a month. The best thing about this account is that you can make unlimited withdrawals with no penalty.
Kent Reliance's one-year Regular Saver pays 4 per cent when you deposit between £25 and £500 every month. The balance must remain above £10 or you'll only get 0.05 per cent, though once the balance goes back over £10 the rate will revert to 4 per cent - which seems fair.
The Leeds BS Regular Saver (issue 3) pays 3.05 per cent, which includes a 1.8 per cent bonus, providing you save £50 to £250 each month.
West Brom BS's Fixed Rate Regular Saver pays a decent 3.3 per cent when you deposit between £10-£100 every month and Nottingham BS's Regular Saver pays 3.1 per cent. You need to deposit between £10 - £250 every month.
The regular saver lump sum savings trick
Because you can only save a certain amount into these accounts per month, if you have a large lump sum, you will have cash sat around doing nothing.
One way to beat this is to drip-feed your lump sum in each month - because of the substantially higher rates on these accounts you will get a better rate of return than you would elsewhere.
Simply find the best easy access savings account to house your lump sum, open a regular saver on top and drip feed money across each month - via your current account.
That way you get the high interest rate from the regular saver, but don't miss out on interest from the lump sum.
What if I don't want to switch my bank?
Those who do not want to switch main bank account could think about opening a joint account with a trusted partner or family member in order to access the regular saver deal.
Some of the current accounts require a minimum deposit per month to avoid charges for using the product.
- Use This is Money's savings calculator to work out how much you could earn
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