Skipton BS launches 7.5% savings rate
Skipton Building Society today launched a market-beating regular savings account that pays out 7.5 per cent.
The deal, which is exclusive to existing Skipton members, allows savers to pay up to £3,000 a year – or £250 a month – with no minimum monthly deposit and the option to skip a month if needed.
The 7.5 percent rate makes Skipton’s deal the highest-paying savings account on the market, on top of First Direct’s regular saver paying 7 percent.
However, as we explain below, it is possible to actually earn more interest with First Direct as more £300 per month can be deposited into the account.
Skipton’s 1.1 million members today have exclusive access to a market-breaking 7.5% regular savings account.
It is thought that 1.1 million Skipton customers are currently eligible to take advantage of this new deal.
Unfortunately, non-members can’t take advantage, as those who sign up must have a savings account or mortgage with Skipton, with a minimum balance of £1, commencing on or before 31 May 2023.
Someone who puts up to £250 a month into Skipton’s deal will accrue £121 in interest over the 12-month period.
Maitham Mohsin, head of savings at Skipton Building Society, said: ‘With billions of pounds left in accounts paying virtually no interest, it is important that the British act now, grab their money by the scruff of the neck and start working hard for it . them.
“Membership matters, which is why our new regular saver gives over a million people the chance to put their money to work harder than other accounts, but we’re also proud to offer above-average value on all of our savings accounts. ‘
How does the account work?
For the 1.1 million eligible UK citizens, Skipton’s Member Regular Saver can be accessed and managed online, at Skipton’s branches, by phone or post.
The 7.5 per cent rate is fixed for the 12 months, with depositors needing £1 to open the account.
This allows customers to save up to €250 per month. Monthly allowances not used can be rolled over to future months, up to a maximum of £3,000 over the 12 month period.
| Column | Rate | Maximum monthly deposit | Maximum balance | Maximum return after 1 year | Can you withdraw at any time? |
|---|---|---|---|---|---|
| Skipton BS | 7.5% | £250 | £3,000 | £121 | No |
| First directly | 7% | £300 | £3,600 | £135 | No |
| Lloyd’s Bank | 6.25% | £400 | £4,800 | £161 | No |
| NatWest | 6.17% | £150 | £5,000 | £60 | Yes |
This means members can deposit more than once a month, provided the maximum monthly investment of £250 is not exceeded, unless they have accrued monthly allowances from previous months which can be rolled over and used in future months.
It is also worth noting that members cannot withdraw part of their account balance, but they can close their account at any time and withdraw the full balance.
Joint accounts are not allowed and Skipton only allows one account per member.
Is it a good idea?
At first glance, Skipton seems to be leading with this rate of 7.5 percent for other regular savings accounts.
But both the Lloyds Bank regular savings account and the First Direct offer customers the opportunity to accrue more interest because they allow for higher monthly deposits, despite the lower nominal rate on offer.
A regular savings account that limits how much someone can put aside each month also means that nominal interest rates don’t prove to be as lucrative as some might assume.
Regular savers are great for people who are dribbling and getting into the saving habit.
In this case, for example, for those who want to put aside £250 of their salary every month – but no more.
Savers who drop their savings into the best, easily accessible deals are unlikely to get as good a return as the best regular savings accounts.
The most accessible savings account pays 3.85 percent. Someone depositing £250 of their money into this account every month could earn just £62 over the course of a year – almost half what someone could earn from Skipton’s regular saver.
| Product | Rate | Monthly security deposit | Return after 1 year |
|---|---|---|---|
| Yorkshire BS Online Rainy Day Account (£1+) (1) | 3.85% | £250 | £62.56 |
| chip (€1+) (2)* | 3.82% | £250 | £62.08 |
| Principality BS Online Double Entry 2 (£1+)(3) | 3.80% | £250 | £61.75 |
| (1) This rate is paid on the first £5,000 in the account. You earn 3.35 percent on balances above that. You can only withdraw money two days a year. | |||
| (2) App only. The money is held by UK authorized bank ClearBank. | |||
| (3) You may withdraw money up to twice a year | |||
Easily accessible accounts are often better, even at lower rates, for one-time funding.
If savers have the money upfront then the daily interest on that lump sum is often better than trickle feeding through a regular saver, even if the regular saver has a higher rate because it’s only the last month that they earn that higher rate on the whole amount.
However, it seems that Skipton’s new deal has finally tipped the balance in favor of regular savings.
The best online low-threshold rate is currently offered by the savings and investment app Chip. It pays 3.82 per cent on balances up to £85,000.
Someone putting £3,000 into this account could earn £114.60 over the course of a year.
That’s £6.40 less than what a saver could earn by saving up to £250 each month at Skipton’s regular saver.
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to compromise our editorial independence.