They can also be used to save up for a deposit for your mortgage. Another benefit of regular savings accounts is that you can earn compound interest if you keep paying in for more than a year. Such good interest rate terms do come with a catch - you have to keep up your contributions or you may be charged a penalty, for example, a loss of interest. There are some 40 accounts on offer from institutions ranging from leading high street banks to small, local, building societies.
Terms vary widely.
But all monthly saving schemes offer variable interest rates so the level quoted can go up or down, depending on changes in interest rates. When you are comparing deals check the small print for items such as charges for withdrawals and penalties for missing a monthly payment. National banks and building societies offer greater accessibility but may not have the best rates.