Lloyds bank says the account is “ideal” for those wanting to save money every month but still keep access to their cash and the account features as one of the top regular savings accounts currently out there by MoneyFacts.co.uk. With a regular savings account, people commit to paying in a certain amount each month. In return, the bank or building society gives someone a higher interest rate than they would get with their current account or ordinary savings account.
The 5.25 percent interest rate is fixed and cannot be changed for 12 months which means people can earn interest on the high rate for the entire account term.
After the 12 months term is finished, the account will become a Standard Saver, which currently only has 0.4 percent interest.
After the account term is over, people then are able to reopen the account again and save for another 12 months.
To save, people will need to set up a standing order of between £25 and £400 every month with the order needing to reach the savings account by the 25th of the month.
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People can also make a bank transfer to top up their savings as long as the total amount of their deposits do not exceed the monthly limit of £400.
If a saver deposits the full £400 each month, after 12 months they will have a balance of £4,926 with the interest paid.
The account is an easy-access which means savers can withdraw money whenever they like and not face a penalty.
People can only however transfer money out of the account online to another Lloyds Bank account.
Lloyds Bank tells people to “bear in mind” they may not be able to replace what they withdraw because of the monthly deposit limit.
The one catch about the account is that it is only available to Club Lloyds current account holders.
With Club Lloyds people can earn credit interest on the money in their current account and can get a Lifestyle Benefit per year and access to exclusive offers.
To be a Club Lloyds customer, people will need to have one of the following accounts:
- Club Lloyds.
- Club Lloyds Silver.
- Club Lloyds Gold.
- Club Lloyds Platinum.
- Club Lloyds Premier.
- Club Lloyds Mayfair Current Account.
- Club Lloyds Mayfair High Interest Cheque Account.
- Club Lloyds Private Banking Premier Current Account.
- Club Lloyds Private Banking Account.
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Alongside this to open an account, people must be 18 or over and a UK resident to open the account, and not have opened a Club Lloyds Monthly Saver in the past 12 months.
People can only have one Club Lloyds Monthly Saver with the account having to be made in someone’s sole name.
However, people can make their savings account a joint account although they can only do this by going into a branch or calling Lloyds bank after the account has been opened it.
The account can be opened and managed online, through Lloyds banking app, in branch or over the phone.
The interest rates for banks are finally starting to creep up with the Bank of England’s base rate.
Over the last year, the central bank has increased its base interest rate in a bid to curb rising inflation which as of last month sat at 11 percent.
The current base rate is 3 percent which was increased last month from 2.25 percent. This was the biggest base rate rise seen in the UK for over thirty years.
The Bank of England initially suggested the rise in inflation would only be temporary but it now accepts that this is no longer the case.
This is why it has raised interest rates eight times between December 2021 and November 2022.
It will likely continue to do so in December 2022 and in the first half of 2023 with predictions that the rate will surpass four percent at the beginning of next year.