Best Savings Accounts

Yes. Savings accounts in the UK are regulated by the FSCS which means your funds are protected up to £80,000 if the provider goes bust. Your money is also safer in a savings account versus an investing account as investments can go down as well as up. However, your returns are not as good with savings accounts because the risk is lower.

With a regular savings account you can make contributions on a regular basis to build up a lump sum. However, you must keep up payments to ensure you get the best rates.

Some of the better rates available on cash savings at the moment come with the regular savers linked to bank current accounts, although there are also regular savings accounts paying decent rates that don’t require you to switch banks. If you can afford to put away a regular amount each month for a year, up to the maximum allowed (typically £250-£500 a month), you could turbocharge the interest on your cash savings pot.

You save into the regular saver account each month for a year, typically, and then receive your interest at the end of the term. There may be conditions attached. If the regular saver is a sweetener to get you to switch banks, you’ll probably need to open a current account using the bank’s switching service.

There may be stipulations such as getting your salary paid into the account, and having a minimum number of direct debits going out each month. Then there may be rules attached to the regular saver, such as having to pay in a minimum or set amount each month. If you miss a payment or pay less than required, you could forfeit your interest. You can’t usually make withdrawals once you’ve started paying in, so in that sense a regular saver is similar to a fixed-rate bond.

• Top tip: in some circumstances, you can earn more than you would on interest for small balances by taking advantage of a bank account switching bonus.

When the fixed term is up, your regular saver will usually be automatically converted into a standard savings account on a much worse rate, so this could be a good time to look for a better deal.

Katie Brain, consumer banking expert at research and ratings provider Defaqto, says regular savings accounts look attractive compared to mainstream savings products even though rates have fallen.

“Regular savings accounts have historically offered better rates than standard accounts to attract regular deposits, but unfortunately the rates have dropped significantly in recent months leaving savers with fewer options.

“To make the most of your savings, it’s worth shopping around and seeing if you are eligible for a better rate at your local building society.” While a number of building societies offer deals which are available to savers nationwide, some decent ones are only accessible through local branches.