Building society launches new savings account with bumper 8% interest rate

Yorkshire Building Society has today launched a new Regular Saver account with an eight percent interest to celebrate UK Savings Week.

The account allows customers to deposit up to £50 per month to help people kickstart a healthy savings habit of investing money “little and often” while earning a “competitive” return.

Savers can open an account in branches, agencies and online. Withdrawals can be made on three occasions throughout the year without penalty, or if closing the account.

By investing the maximum amount of £50 in the account per month, savers can amass a balance of £626.01 after 12 months at the current interest rate.

This new deal follows a recent study by the Bristol University Personal Finance Research Centre, sponsored by the Yorkshire Building Society, which explored the relationship between savings and wellbeing. It found that having a regular savings habit, no matter how small the amount saved, improves life satisfaction.

Regular savers were 66 percent more likely to have high life satisfaction compared to those that don’t save at all.

Chris Irwin, director of savings at Yorkshire Building Society, commented: “We know it’s important for people to try and build their financial resilience where they can, and for us as a Society to help people to save, whatever their age or experience with saving.

“We want to help people kickstart a healthy savings habit, improve their financial wellbeing, and are trying to promote a save-first buy-later culture to help people put aside money that will help build a financial safety net, achieve their savings goals or simply fund their next big purchase.”

He added: “Regular savings accounts are one way we can encourage customers to establish healthy savings habits. We’re really proud that this new account, while promoting saving little and often also offers a very competitive return and supports people to take action this UK Savings Week.”

Yorkshire Building Society's product is one of several competitive regular savings deals currently available, offering the potential for even greater returns.

Principality Building Society offers an Annual Equivalent Rate (AER) of eight percent. The term of the account runs for six months and up to £200 can be invested per month. The account can be opened with a minimum deposit of £1 and interest is paid on maturity.

The online-based digital bank Dirst Direct falls just behind with an AER of seven percent. The rate is fixed for 12 months and people can get started with just £25. Interest is calculated daily and paid on account maturity exactly one year after opening. Between £25 and £300 can be deposited per month in multiples of £5, but withdrawals are not permitted throughout the 12-month term. In this event, the account will have to close and interest will be paid up to the closure date at the Savings Account variable rate instead.

Meanwhile, HSBC has recently joined the top three with its newly launched Regular Saver, offering an AER of seven percent. Savers can get started with £25 and up to £3,000 can be invested in the account overall. The account allows a maximum of £250 payments per month for 12 months, and interest is paid on maturity. Earlier access is permitted on closure only and will be subject to a lower interest rate paid.

For those looking for a new way to save some cash, we round up the top-rate savings accounts every week, from easy access to Cash ISAs.