Building society launches new savings account paying 'appealing' 6% interest rate

Monmouthshire Building Society launched a regular savings account for new customers today (Friday), paying an "appealing" 6% AER interest rate.

Savers can deposit up to £500 into the account each month within its 12-month term, meaning a maximum of £6,000 can be put away in total. Regular savings accounts typically require people to deposit a set amount each month and make minimal to no withdrawals. However, Monmouthshire's account offers more flexible terms, as there are no restrictions on withdrawals. Chris Jeanes, senior product manager of Monmouthshire Building Society, said: "We are really pleased that we can launch this new Regular Savings Account so soon after we have launched our new app.

"Currently, this is one of the most appealing interest rates offered on the market for customers looking to save up to £500 a month into the account, allowing them to take advantage of the great introductory interest rate."

He added: "At Monmouthshire Building Society, we pride ourselves on doing all we can for our customers and the communities we serve via our branches and our online service. Now, thanks to our new app, this customer-service-first ethos can extend further, again allowing our customers to control their finances from the palm of their hand."

The new Regular Savings Account can be opened online, in a branch, or through the mutual's new app with a minimum deposit of just £1. To open it, savers must be 16 and over and UK resident.

Based on the current interest rate, a £6,000 deposit is estimated to earn £194.55 over 12 months, bringing the total balance to £6,194.55.

How does the account compare?

Principality Building Society tops the table for regular savers with an Annual Equivalent Rate (AER) of 7.5%. The account runs for six months, and interest is paid on maturity. Savers can invest up to £200 per month, which means the pot can grow to a total of £1,200, and withdrawals are not permitted until the account matures.

With a maximum monthly investment of £200, savers will end up with £1,227.53, including £27.53 in interest. So, while it may have a market-leading AER, its six-month term limits the total interest earned.

Zopa offers a 7.1% AER over 12 months with a maximum limit of £300 per month, allowing savers to amass £3,600 in total savings. Interest is paid at the end of the term, with a full £3,600 deposit expected to earn around £136.50, bringing the total balance to approximately £3,736.50.

Savers are allowed to withdraw money from the Zopa savings account at any time without penalty. However, they'll only be able to replace the money within the monthly allowance of £300. For example, if you withdraw £500 but want to put money back in, you can only deposit up to £300.

First Direct is just behind with a 7% AER over 12 months. The account allows a monthly deposit of £300, which can also total up to £3,600 in savings over a year. At the end of the term, First Direct says savers will amass around £3,736.50, including £136.50 in interest.

Other providers offering competitive interest rates on regular accounts include Nationwide Building Society with a 6.5% AER, and Lloyds Bank with a 6.25% AER on its Club Lloyds account.