Lloyds Bank has launched a new 8% fixed-rate regular savings account allowing eligible customers to earn up to £120 in interest over a 12-month period.
How the Lloyds Monthly Saver Works
The Lloyds Monthly Saver allows customers to deposit between £25 and £250 each month. Savers who pay in the maximum amount every month could build a balance of £3,120 after 12 months, including interest.
The 8% rate is fixed for the full term, and customers can withdraw money at any time without paying a penalty. After the 12-month period ends, the account will convert into a Standard Saver, or customers can apply for a new Monthly Saver account if they remain eligible.
Account Has Conditions for New Customers
The account is only available to people who already hold a Lloyds current account. Customers also cannot have opened a Lloyds Monthly Saver account within the previous 12 months.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said the account could appeal to existing Lloyds customers looking to build savings gradually. She said regular savings accounts can be attractive because of their high headline rates, but monthly deposit limits mean they may not suit people with larger amounts of money to invest.
Other High-Rate Savings Options Available
The Bank of Scotland Monthly Saver also offers an 8% AER fixed rate under similar conditions. Customers can save between £25 and £250 each month, with withdrawals available without charges.
Santander also offers an 8% AER regular savings account. Customers can deposit up to £200 per month, with interest including a 5% bonus for the first year. A maximum deposit of £2,400 could generate around £104 in interest over the term.
After the initial 12 months, the Santander account rate falls to 3% AER/gross.
Zopa Offers Higher Monthly Limits
Zopa’s savings account offers a 7.1% AER rate over six months and allows deposits of up to £300 per month. A customer depositing the maximum amount could save £1,800 and earn around £80 in interest over the term.
Withdrawals are allowed without a penalty, although customers can only replace withdrawn money within the monthly deposit limit.
Savers Should Compare Account Rules
While high-interest regular savings accounts can provide attractive returns, they are designed for people building savings month by month rather than those with a large lump sum.
Experts recommend comparing different options, including easy-access accounts, notice accounts and fixed-rate bonds, to find an account that matches individual savings goals.
