Building society launches new 6.5% interest savings account and earns 'excellent' rating

Scottish Building Society has launched a new regular savings account this week with an interest rate of 6.5% AER, earning an "excellent" Moneyfacts rating.

Savers can deposit up to £250 into the account each month within its 12-month term, meaning a maximum of £3,000 can be put away in total. Regular savings accounts typically require people to deposit a set amount each month and make minimal to no withdrawals. This account offers more flexible terms as withdrawals are allowed, as long as a minimum £50 balance is kept. Commenting on the deal, Caitlyn Eastell, finance expert at Moneyfactscompare.co.uk, said: "Scottish Building Society has launched a new variable rate regular savings account this week, which pays a competitive 6.50%.

"The account grabs a prominent position when compared against its peers and may attract savers who want to build a savings habit. Savers can deposit a maximum of £250 per month and any unused subscriptions can be made up later.

"Further adding to the account's appeal, savers can make unlimited withdrawals throughout the 12-month fixed term."

She added: "Overall, this receives an Excellent Moneyfacts product rating."

The new Regular Savings Account can be opened online, in a branch, or by post with a minimum deposit of £50. To open it, savers must be 18 and over and UK residents.

Based on the current interest rate, a £3,000 deposit is estimated to earn £105.63 over 12 months, bringing the total balance to £3,105.63.

How does the account compare?

Principality Building Society offers the market's highest Annual Equivalent Rate (AER) at 7.5%. Savers can pay in up to £200 a month over a sixmonth term, with no withdrawals allowed. A maximum £1,200 deposit could return £27.53 interest, giving a final balance of £1,227.53. So, while it may have a market-leading AER, its six-month term limits the total interest earned.

Zopa offers 7.1% AER over 12 months, with a higher monthly allowance of £300. This means savers can deposit up to £3,600 across the year. Interest is paid on maturity, with the total pot expected to reach £3,737, including £137 in interest. Withdrawals are allowed, but only up to the monthly limit can be replaced.

First Direct also offers a 7% AER over 12 months with a monthly allowance of £300. Savers paying in the full £3,600 would see around £136.50 in interest, taking the balance to £3,736.50 after a year. Withdrawals are not permitted for this account.

Savers have been urged to review their accounts to ensure they're opting into the right ones for their own financial goals and circumstances.

Rachel Springall, finance expert at Compare Savings, ISAs, Mortgages and More , said: "It can seem a little confusing to pick the right savings account as there are so many options out there.

"A regular savings account is a good choice to instil the savings habit, as many of these accounts require savers to put money away every single month."

"Easy access accounts provide the most flexibility, and some savers may want a pot they can quickly access in case of a financial emergency. However, there are some attractive regular savings accounts that do allow withdrawals, so savers just need to check any terms and conditions carefully to ensure they are up to speed with how it works."