How regular saver interest works

Regular saver rates look high, but the actual interest earned is less than you might expect. That's because you deposit monthly, so your average balance over the year is only about half of the total you'll eventually save. A 7% regular saver with £300/month doesn't earn £252 (7% of £3,600) — it earns roughly £136 because your early deposits earn interest for 12 months but your last deposit only earns for 1 month.

Maximise your regular saver income

• Open multiple accounts — if you have current accounts with several banks (from bank switching!), open a regular saver with each
• Max out every month — set up a standing order on payday so you never miss a month
• Don't withdraw early — most regular savers drop to a lower rate or close if you withdraw before maturity
• Track maturity dates — when your regular saver matures, the money usually moves to a lower-rate account. Move it and open a new one

Regular savers + bank switching = more profit

The best strategy combines bank switch bonuses with regular savers. When you switch to a new bank for the bonus, you typically get access to their regular saver too. A single switch could net you £175 in bonus plus £100+ in regular saver interest — that's £275 from one bank relationship.