New contributor Frugalist is back to explain how he gamifies chasing the best regular saving accounts to make his cash work harder.
There’s something deeply satisfying to me about maximising my return on cash.
Not as an alternative to investing, of course. I’ve got bigger ambitions than simply fighting a slugging match against inflation with respect to my long-term goals.
But when you’re anticipating the risk of your boiler exploding in December, you’re wondering why your car’s clutch smells funny, or you’ve built up a giant stoozing hoard, cash savings accounts fit the bill.
Many people treat cash as afterthought. Whether through prudence or – let’s face it – laziness, they’ll put up with a less-than-1% interest rate from their bank.
But I won’t! Instead I’ve developed a hobby of finding the savings accounts with the juiciest rates.
If I’ve got cash I’ll always try to squeeze every drop of interest out of it.
I love big rates (and I cannot lie)
What gets me really giddy and excited are regular savings accounts.
The principle feature (/downside) of regular savers is that they invariably cap how much money you can put in each month.
Sometimes you can freely withdraw money whenever you like. More often your money is locked up for a time. They may pay a set rate of interest for a year before maturing, or the rate may be variable (which tends to mean downwards in the current climate…)
Either way the key is they usually won’t let you add money indefinitely. Instead you’ll earn interest for a year and then they’ll mature and you’re back to square one.
What’s the upside? Well in return for these limitations you can score some pretty attractive interest rates.
How about Virgin smashing the leaderboards with a 10% account in 2024? Or Saffron Building Society grabbing headlines with a 9% rate?
Kerpow!
When you clickthrough to read about these great rates though, you’ll typically find authors and readers in the comments alike saying the rates are too good to be true.
Geoff from Shrewsbury might claim: “I get more interest putting £40,000 in a normal easy access account.”
Mildred from Ramsbottom adds: “Erm, actually you’ll only get half the advertised rate.”
It’s almost impressive how much vitriol can be generated by something as seemingly uncontroversial as a regular savings account.
Regular savings accounts needn’t be confusing
I’m here to tell you that these accounts are far simpler than people suggest – and that you can do better than Mildred moans.
Hopefully I’ll provoke less fury in the Monevator comments for my troubles, too!
Let’s consider that Virgin account (though it’s no longer on the market as I write).
Virgin paid 10% (10.38% AER) on a maximum deposit of £250 per month for 12 months.
- By the sixth month, Mildred could have loaded it with £1,500 of contributions
- But the balance would only reach its maximum £3,000 in the final month
- So Mildred would get interest on the full £3,000 balance only in the twelfth month
To calculate what she’d earn over a year, a rough rule of thumb is to take the average balance (£1,500) and multiply that by the AER (10.38%), giving £155.70.
Getting a more precise number is a nightmare. It depends on the number of days elapsed when cash qualifies as interest-bearing in your account. Weekends and Bank Holidays aren’t just for frolicking – they are also for playing havoc with financial predictions and computer systems.
Anyway, if by comparison you put £250 into a 5% easy access savings account each month, then you would receive £82.50 in interest in a year.
That’s roughly half what you earned from Virgin’s 10% offering – just as you’d expect from a 5% account.
Limits are frustrating
Of course there are legions of people out there with tens or even hundreds of thousands in cash savings. Such people may remember – wistfully and rather selectively – heady 7% easy access savings interest rates being paid long ago by the likes of Icesave and Kaupthing. (Ah, great days!)
So when a flashy headline nowadays touts, say, a 9% interest rate, it’s excellent clickbait to attract these frustrated savers.
And it’s not surprising if on reading the restrictions in the T&Cs, some of these people then complain that regular savings accounts are pointless as you can only save £250 per month.
However just because you have £20,000 in total savings doesn’t mean you need to put the entire lot into one bank account.
Your savings pot is not monolithic
Separating your cash into pots instead and then maximising the interest rate on each can make a big difference to your total return, as I’ll demonstrate.
Do check those terms and conditions though. As I mentioned some regular savings accounts insist on no withdrawals until the term is up.
If you’re relying on a pot of cash for emergencies, you’ll need easy access. So check the clauses carefully.
The numbers feel unfair
If Mildred worked hard to put £3,000 in her 10.38% savings account, then she might have thought she could earmark a £311 interest payment for a new TV.
When she instead received roughly £150 over a year – and she doesn’t understand why – you can see how she’d feel diddled.
Now she repeats that same mantra for a decade: “They only pay half the rate”.
My issue is not that these people have these feelings – even if they are misinformed – but how their complaints get amplified and repeated, tarring regular savings accounts unfairly.
Institutions are partly to blame too for touting the juicy headline rate rather than the actual interest payments someone can expect for a year.
How I look at the maths
To be clear, ‘half the rate’ is actually no different mathematically to my ‘half the balance’ rule of thumb from earlier.
- £3,000 multiplied by half of 10.38% is £155.70.
If you didn’t fall asleep in your maths lessons, you will know that the order in which you multiply and divide numbers makes no difference to the result.
But psychologically, it’s totally misleading. The bank is not paying half the amount of interest owed. They are paying the full amount of interest on the average balance.
Not appreciating this can needlessly discourage people from opening such accounts, and hence from earning the most interest they could.
Making the best of regular savings accounts
Most of us function on regular income. We get paid monthly. We pay our bills monthly.
So if an account lets us save each month, that actually aligns with our finances.
If you can save a fresh £250 from your paycheque per month, then when you open a 10% regular saver you are maximising its benefits.
Whereas if you whinged about it ‘not really being 10%’ and instead stuck that £250 each month into a 5% easy access account, you would be missing out on double the interest.
But what if you’re in the camp of having a starting pot of cash? Say £3,000.
You don’t need to keep it under your mattress doing nothing as you slowly load it into your regular savings account. Instead:
- Put £3,000 in a 5% easy access account
- Each month, move £250 into the 10% regular savings account
- Earn 5% on £1,500 (£75)
- Earn 10% on £1,500 (£150) as well
- After a year withdraw your £225 in £5 notes and throw them into the air like Scrooge McDuck
That’s far better than the £150 you’d get using just one of the accounts. It’s an effective interest rate of 7.5%.
Testing this out with an example
Assume you amassed £10,000 to stash over the course of the past year. Let’s see what you might have earned in doing so.
I’ll use some recent examples of regular savers rather than only limiting myself to ones available right now.
That’s because the examples quickly get out-of-date anyway, and with regular savers it’s important to jump on opportunities when they arise. Products are withdrawn quickly if they prove too popular.
Consider for example the Monmouthshire Building Society. In August it launched two accounts allowing members to earn 7% on a whacking £1,500 per month! But it didn’t wait even a month before closing such accounts to new customers.
In the following table of recently available regular savings accounts, those in bold could still be opened as of October 2025:
| Provider | Rate (AER) | Monthly Max | Average Balance | Approx Interest |
| Virgin | 10.38% | £250 | £1,500 | £156 |
| Zopa | 7.10% | £300 | £1,800 | £128 |
| Co-Op | 7.00% | £300 | £1,800 | £126 |
| Nationwide BS | 6.50% | £200 | £1,200 | £78 |
| Progressive BS | 7.50% | £300 | £1,800 | £135 |
| RBS / Natwest | 5.50% | £150 | £900 | £50 |
| Principality (6 Month) | 7.50% | £200 | £600 | £45 |
| Saffron BS | 8.00% | £50 | £300 | £24 |
| Total | £1,750 | £9,900 | £741 |
Utilising all of these products to save money each month would have seen you earn £741 in total interest after 12 months.
In contrast, putting £9,900 into a standard savings account at 4.5% would have generated just £446.
Hence someone using the regular savings accounts would have generated £295 additional income (pre-tax), compared to simply taking out the best easy access account and leaving it there.
This is a little pessimistic though, as many of these regular savers are either fixed or are held at high rates despite base rate reductions. And that can’t be said for the market-leading easy access accounts.
Also I’ve not cherry-picked the best rates here. Swap those harder-to-get Monmouthshire accounts in for the RBS and Nationwide options, and your returns would be even higher.
Many happy returns
It’s easy to nitpick the scenario I’ve laid out. In practice it isn’t quite so simple.
You might be thinking, for instance, that a chunk of that £10,000 would have to wait for several months on the sidelines before it could be moved into a regular saving account. I’ll get to that in a minute!
As far as the maths is concerned though, it’s correct insofar as I’m assuming an average balance of £10,000 earning c. 7%. And from a ROCE1 perspective that’s around £700.
In my opinion this is where many articles get a bit stuck in the weeds. They focus on individual accounts and drip-feeding money across. It all sounds a faff.
However as I see it, if you’re looking at cash management as part of your wider portfolio, it’s more about how much you earn from maximising your return on your cash over many years. It’s a process, not a one-time thing.
In practical terms, you’ll look to open up these accounts as they are launched and when their rates pique your interest. As spare cash becomes available you’ll simply deploy it into the highest-paying accounts at your disposal, subject to their contribution limits.
If you’ve got, say, ten of these accounts then money will be cycling in and out of them periodically – such that you aren’t actually performing a mechanical drip-feed from an easy access to a regular saver.
You’re simply deploying cash (from whatever source) as it becomes available into your best-paying regular savers and recycling money as your accounts mature.
In this way cash from maturing accounts will only sit in easy access accounts for short periods of time, before being shuffled off into the next regular saver.
Still all this does raise another pushback…
Are regular savings accounts worth the effort?
Perhaps you think that £295 is not worth the hassle of maintaining all of these accounts.
You may also earn enough interest to pay tax on savings interest. That takes a further bite out of the possible gains.
Moreover with some building societies you must be an existing member to qualify for the best accounts. Even I wouldn’t recommend you speculatively join Saffron BS in the hopes of receiving £24 interest in some future year.
That said, joining the Monmouthshire BS a couple of years back definitely paid off for me now that I’ll be earning £630 from its exclusive 7% accounts.
And strategically choosing to start doing business with one or two key building societies might be worth the (digital) paperwork.
Nationwide is growing its user base consistently, so I’ll use its regular saver as an example of one that might be opened by Monevator readers.
With it paying 6.5% interest on £200 per month, we can quickly compare Nationwide’s regular saving to a 4.5% easy access alternative on an after-tax basis:
| Tax Rate | 4.5% Savings | 6.5% Savings | Difference |
| 0% | £54 | £78 | £24 |
| 20% | £43 | £62 | £19 |
| 40% | £32 | £47 | £14 |
| 45% | £30 | £43 | £13 |
Don’t forget, if you’re a 20% taxpayer earning less than £1,000 in interest per year or a 40% taxpayer earning less than £500 in interest per year, you would also sit in the first row.
By opening the regular savings account, you’ll benefit by roughly £24.
If the only requirement is a couple of minutes of tapping away on an Nationwide app you already have installed, that’s a pretty good return on your time IMHO.
But the big win comes when you have a portfolio of such accounts. This enables you to maximise the benefits of all and spread the maturities through the year.
You’ll also likely end up with a monster of a spreadsheet that you can show off to your friends and family.
Does it spark joy?
Everyone is different, so I can’t argue that regular savings accounts are for you.
Clearly if you’re a new saver with a few thousand pounds who has just started rolling your snowball, then these tactics are going to be more consequential than for grizzled Monevator veterans sitting on six- or seven-figure investment portfolios.
Even so, some people take real satisfaction out of extracting the most benefit from our cash for its own sake. I’ll let you guess whether that includes me. (Clue: I spend my free time writing about savings for Monevator!)
But I won’t stretch to the more extreme tactics employed by some, such as:
- Timing their payments based on which specific days qualify for interest at the receiving bank
- Opening fixed-rate regular savers speculatively in case rate drops make them more useful in future
- Finding loopholes to cram extra cash into their accounts
I think the law of diminishing returns kicks in here, given the limits of how much cash you can practically put away through even a portfolio of regular savings accounts.
But in more everyday ways, if you’re going to hold some cash then why not shoot for getting the best rate you can?
You’ll need to keep an eye on services that track rates. (Try MoneyFacts.) You’ll also need to get in before the masses of regular saver aficionados overwhelm new offerings and applications are closed, especially with the smaller buildings societies.
Happy stashing! Just please promise me that you’ll never say regular savers only pay half the advertised interest.
- Return on Capital Employed. [↩]
