New 6% Regular Saver from Earl Shilton Building Society
Earl Shilton Building Society has launched a Monthly Saver account offering a competitive 6% interest rate, allowing savers to open with as little as £1. The account is designed to encourage regular saving habits with monthly deposits capped at £500, enabling a maximum total contribution of £6,000 over 12 months. Based on current rates, a full deposit schedule would earn approximately £199 in interest over a year.
The account is available to UK residents aged 13 and over, and can only be opened in branch. It offers more flexibility than typical regular savings accounts, permitting up to two withdrawals without penalty. If additional withdrawals are needed, the account must be closed. Interest is paid on the anniversary of opening.
Comparison with Other Regular Savings Accounts
Santander currently offers the highest regular savings rate at 8% AER, including a 5% AER bonus for one year. Customers can deposit up to £200 per month, with a full £2,400 deposit estimated to earn around £104 in interest. After 12 months, the rate drops to 3% AER. Withdrawals are allowed at any time without penalty.
Zopa provides a 7.1% AER over six months with a £300 monthly limit, totalling £1,800. A full deposit would earn approximately £80 in interest. Savers can withdraw funds at any time without penalty but can only replace money within the £300 monthly allowance.
First Direct offers a 7% AER over 12 months, allowing monthly deposits of £300, totalling £3,600. At term end, savers would have £3,736.50, including £136.50 in interest. Withdrawals are not permitted until the term ends.
Inflation and Real Returns
With UK inflation at 2.8% (CPI) in June, above the Bank of England's 2% target, savers in low-paying accounts face a double blow of weak interest and eroded spending power. LHV Bank analysis shows that a £20,000 pot earning the average easy access rate of 2.12% would grow to £22,212 over five years, while a 4.15% rate would yield £24,509. However, with 2.8% inflation, the real return on a 2.12% account is roughly -0.66%.
Alex Beavis, interim director of banking at LHV Bank, said: "Consumers continue to lose out to the loyalty penalty. Loyalty counts for little in savings. Banks profit from inaction, and savers who leave money in mediocre accounts get substandard returns, made worse by inflation eroding what they have." He added that active savers who check, switch, and keep doing it can turn savings into real growth.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, commented: "It is never too late for consumers to start putting some cash aside for any future goals, as those who save little and often can feel more in charge of their financial wellbeing. Regular savings accounts are ideal for slowly building a pot as they encourage the savings habit. However, consumers will need to work out if they are the right choice for them, as some accounts can be restrictive and might not be suitable for larger deposits."
