Home > Savings Accounts > Best Monthly Income Savings Accounts

Monthly income savings accounts are good if you’ve got a decent chunk of cash savings and you want to earn a regular income from it, there are accounts on the market which pay interest monthly, and you can choose to withdraw it or keep it in your savings pot to earn more interest.

What is a monthly income savings account?

As the name suggests, this an account pays you the interest earned on your savings monthly, rather than quarterly or annually. Many different types of savings accounts can be monthly income payers: you can find Cash ISAs, notice accounts, fixed-rate bonds and easy-access accounts that all offer this feature.

Pros and cons of monthly income savings accounts

The key selling point is that you can take a regular income from your cash savings without eroding your total pot over time. You have the flexibility to choose from a range of different types of savings accounts which give you the option to take your interest monthly. You can also usually choose whether to take your interest as a payment into your bank account each month, or to leave it in your pot so it can benefit from compounding (earning interest on interest) so your pot can grow more quickly.

These accounts are best for people with large sums saved, so you can earn enough interest to get a reasonable payout each month. However, the Financial Services Compensation Scheme only covers your savings up to £85,000 per regulated financial institution, in the event your provider collapses, so if you have a lot of savings it is worth spreading them across more than one bank.

Another downside is that the current record-low rate environment is punishing savers with poor savings rates on offer. Research from Which? found there is quite a gap between the rate available on accounts that pay interest monthly versus annually. If the rate you get is lower than the rate of inflation, the purchasing power of your savings pot will shrink over time. Depending on the type of account you choose, you may also face restrictions on how much and how often you can deposit and withdraw.

Where are the best monthly income savings account deals?

The Bank of England base rate is quite high at the moment, which means savings accounts are offering some very good interest rates

These are a few of the highest interest-paying monthly income saving accounts on the market at the moment, although things are changing quickly as providers start to pass on the latest base rate cut.

Here are three of the  on the market at the moment:

  1. Gatehouse Bank 5 Year Fixed Term Woodland Saver – AER 5.10%
  2. Paragon Bank 5 Year Fixed Rate Savings Account – AER 4.65%
  3. Aldermore 2 Year Fixed Rate Account – AER 4.60%

Monthly income saving account alternatives

If you want to see if there are better saving account interest rates Hargreaves Lansdown offers an Active Savings product, where you can save across a range of different savings accounts without having to open up a new account each time.

We have also listed below some of the latest saving account switching offer and providers with some of the best interest rates for your savings.

4.75 % AER
raisin
Investec 2 year 4.75 % AER fixed rate bond
Your deposits with Investec 24 Month Fixed Term Deposit are eligible for protection by the…Show More
Your deposits with Investec 24 Month Fixed Term Deposit are eligible for protection by the Financial Services Compensation Scheme (FSCS). The FSCS is the United Kingdom’s statutory deposit guarantee scheme that covers deposits in individual savings accounts up to £85,000, per banking group regulated by the Financial Conduct Authority or the Prudential Regulation Authority. It is available for deposits with most UK high-street and online banks and means if the bank fails, and deposits become unavailable, the scheme may cover your deposit account deposit up to the £85,000 per person, per banking group limit. Compensation limits are per person per firm, not per deposit. Be aware that if you have other deposits with this bank (or banking group) then the £85,000 protection applies only to eligible deposits up to this limit.Details:
  • Bank: Investec
  • Country: United Kingdom
  • Interest rate: 4.75 % AER
  • Term: 24 Months
  • Interest type: Fixed
  • Minimum amount: GBP 1,000.00
  • Maximum amount: GBP 85,000.00
  • Interest payment: Interest paid upon maturity
  • Costs: No costs
  • Availability: At the end of the term
  • Currency: GBP
Show Less
4.85 % AER
raisin
Zenith Bank 4.85 % AER 3 year fixed rate bond
Your deposits with Zenith Bank UK Ltd 36 Month Fixed Term Deposit are eligible for…Show More
Your deposits with Zenith Bank UK Ltd 36 Month Fixed Term Deposit are eligible for protection by the Financial Services Compensation Scheme (FSCS). The FSCS is the United Kingdom’s statutory deposit guarantee scheme that covers deposits in individual savings accounts up to £85,000, per banking group regulated by the Financial Conduct Authority or the Prudential Regulation Authority. It is available for deposits with most UK high-street and online banks and means if the bank fails, and deposits become unavailable, the scheme may cover your deposit account deposit up to the £85,000 per person, per banking group limit. Compensation limits are per person per firm, not per deposit. Be aware that if you have other deposits with this bank (or banking group) then the £85,000 protection applies only to eligible deposits up to this limit.Details:
  • Bank: Zenith Bank UK Ltd
  • Country: United Kingdom
  • Interest rate: 4.85 % AER
  • Term: 36 Months
  • Interest type: Fixed
  • Minimum amount: GBP 1,000.00
  • Maximum amount: GBP 85,000.00
  • Interest payment: Annual interest payment
  • Costs No costs
  • Availability: At the end of the term
  • Currency: GBP
Show Less
4.90 % AER
raisin
Tandem Bank 3 year 4.90 % AER fixed rate bond
Your deposits with Tandem Bank – 36 Month Fixed Term Deposit are eligible for protection…Show More
Your deposits with Tandem Bank – 36 Month Fixed Term Deposit are eligible for protection by the Financial Services Compensation Scheme (FSCS). The FSCS is the United Kingdom’s statutory deposit guarantee scheme that covers deposits in individual savings accounts up to £85,000, per banking group regulated by the Financial Conduct Authority or the Prudential Regulation Authority. It is available for deposits with most UK high-street and online banks and means if the bank fails, and deposits become unavailable, the scheme may cover your deposit account deposit up to the £85,000 per person, per banking group limit. Compensation limits are per person per firm, not per deposit. Be aware that if you have other deposits with this bank (or banking group) then the £85,000 protection applies only to eligible deposits up to this limit.Details:
  • Bank: Tandem Bank
  • Country: United Kingdom
  • Interest rate: 4.90 % AER
  • Term: 36 Months
  • Interest type: Fixed
  • Minimum amount: GBP 1,000.00
  • Maximum amount: GBP 85,000.00
  • Interest payment: Annual interest payment
  • Costs: No costs
  • Availability: At the end of the term
  • Currency: GBP
Show Less
5.00 % AER
raisin
Tandem Bank 5.00 % AER 5 year fixed rate bond
Your deposits with Tandem Bank – 60 Month Fixed Term Deposit are eligible for protection…Show More
Your deposits with Tandem Bank – 60 Month Fixed Term Deposit are eligible for protection by the Financial Services Compensation Scheme (FSCS). The FSCS is the United Kingdom’s statutory deposit guarantee scheme that covers deposits in individual savings accounts up to £85,000, per banking group regulated by the Financial Conduct Authority or the Prudential Regulation Authority. It is available for deposits with most UK high-street and online banks and means if the bank fails, and deposits become unavailable, the scheme may cover your deposit account deposit up to the £85,000 per person, per banking group limit. Compensation limits are per person per firm, not per deposit. Be aware that if you have other deposits with this bank (or banking group) then the £85,000 protection applies only to eligible deposits up to this limit.Details:
  • Bank Tandem Bank
  • Country United Kingdom
  • Interest rate 5.00 % AER
  • Ter m60 Months
  • Interest type Fixed
  • Minimum amount GBP 1,000.00
  • Maximum amount GBP 85,000.00
  • Interest payment Annual interest payment
  • Costs No costs
  • Availability At the end of the term
  • Currency GBP
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£25
raisin
Refer a friend
Recommend a friend to raisin and you could both receive £25
If you use raisin to save money you can use their refer a friend scheme to earn £250 for…Show More
If you use raisin to save money you can use their refer a friend scheme to earn £250 for you and them.How it works:
  1. Receive £25 into your Raisin Account for every friend you refer who funds a savings account with £5,000 or more.
  2. Each one of your referred friends will receive £25 into their Raisin Account when they register with us and fund a savings account with £5,000 or more.
  3. All you need to do to take advantage of our refer a friend bonus is fill in the names, locations and email addresses of the friends who you want to refer, and we’ll send them an email stating that you’re inviting them to join the Raisin UK savings marketplace.
Terms and conditions apply Show Less
1.25%
Hargreaves Lansdown
Paragon Easy Access 1.25% AER
1.25% AER. 1.25% Gross p.a. Minimum opening balance £1.00 Maximum balance £500,000.00…Show More
1.25% AER. 1.25% Gross p.a. Minimum opening balance £1.00 Maximum balance £500,000.00 You must be an individual aged 18 or over, applying for your own product and UK resident. Show Less
Hargreaves Lansdown
Hargreaves Lansdown Active Savings
Get interest rates as high as 5% and manage your savings in one place with a Hargreaves…Show More
Get interest rates as high as 5% and manage your savings in one place with a Hargreaves Lansdown Active Savings Account. Pick and mix interest rates that are often the best in the market, from easy access savings to fixed rate bonds. Show Less
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