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Best buy 9% savings account launches…but there’s a catch

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
01/06/2023

Saffron Building Society has launched a regular saver account offering existing customers 9% – the first time rates have been this high in over a decade.

The mutual has today launched the Members’ Month Loyalty Saver paying an inflation-beating, market-leading 9% gross/AER, which is also double the current Bank of England base rate of 4.5%.

The last time savings rates were anywhere near this level was way back in February 2011 when the top paying regular saver offered 10%, according to Moneyfactscompare data.

However, the Saffron deal is for existing customers only – those who have been with it a year or more (1 June 2022) so if you’ve recently opened an account or taken out a product, you won’t be eligible unfortunately. Out of its 100,000 members, it said 96,400 customers are eligible.

The other important point to note is that this is a “limited edition” account on a first-come, first-served basis, with Saffron confirming it can withdraw it from sale at any time. It has a cap in mind, but didn’t share this with this publication. So, if it’s right for you, you may not want to hang around too long.

Here’s what you need to know…

Saffron Members’ Month Loyalty Saver

This is a regular savings account allowing customers to put away a minimum £1 and maximum £50 a month.

It can be opened online or in branch with a minimum of £1. If the balance falls below this, the interest rate will drop to 0.05% gross/AER variable. You can make multiple payments into the account each calendar month, as long as you don’t exceed the £50 monthly allowance.

However, if you miss a monthly deposit, you can’t make it up in a subsequent month, so if you can, try set up a standing order to go out each month.

You can access your money – once a month – without penalty and you can close your account at any time.

Interest is calculated daily and paid on maturity. Based on the maximum £50 a month contribution, the estimated balance at the end of the 12 months would be £629.25.

After the year’s up, your cash will be transferred to the Saffron Maturity Easy Access account, but your account number won’t change. If you don’t want this transfer, Saffron said it will write to customers before maturity to let them know their options.

It’s called the Members’ Month Loyalty Saver as Saffron has launched it to tie in with its “first-ever Members Month”, held from 1-30 June. It said this is an “opportunity for Saffron to celebrate and thank its members”, where it will hold a daily £100 prize draw, 150 chances to save £150 with a free single will or £150 towards a mirror will or trust, a tea party with former England rugby player Martin Bayfield, and the chance to speak to Saffron CEO Colin Field in the local branch.

Field said: “Members are the heart and soul of the Society and we are delighted to have this opportunity to reward, surprise, and delight them.”

Saffron pips Skipton’s short-lived market-leading rate

The Saffron regular saver comes just after Skipton Building Society launched its Member Regular Saver (Issue 2) today paying 7.5% gross/AER on a minimum £1 and maximum of £3,000 a year.

Like Saffron, the Skipton deal is for existing customers who held a savings or mortgage account with it on or before 31 May 2023. It can be opened online, over the phone, by post or in branch.

The maximum you can deposit each calendar month is £250, though there’s no minimum monthly subscription amount or limit on the number of times you can deposit cash, just as long as you stick to the £250 a month level.

Further, any unused allowance can be rolled up into the next month which refreshes on the 1st of each month.

Based on £250 deposited each month with no withdrawals, you would have a total balance of £3,161. The interest rate is fixed for the term of this account; it is earned daily and paid on the anniversary of the account opening.

You can’t withdraw part of your account balance during the 12-month term. But you can close your account at any time and withdraw the full balance without penalty, with customers receiving any interest earned up to the point of closure.

At the end of the 12-months, your cash will be transferred to a Skipton variable rate easy access account unless you tell it otherwise.

Regular savers on the up

The offers from both Saffron and Skipton mean by rate alone, they’re without doubt top of the best buy tables. However, you can’t get round the fact that they’re for existing customers, either as of yesterday, or in Saffron’s case as of 1 June 2022.

For those looking for a decent paying regular saver account, the First Direct Regular Saver offers 7% AER. Newbies can sign up to its current account to be eligible to open the linked savings product (and you can bag £175 too). Here you can save between £25 and £300 a month meaning you could earn up to £136.50 in interest.

Elsewhere, the Club Lloyds Monthly Saver pays 6.25% AER for those depositing between £25 and £400 each month, and allows you to withdraw your cash without penalty. You’ll need a current account to get the deal, but again, newbies can open do this to be eligible for the linked saver.

Note that the Club Lloyds current account has a £3 monthly fee, though it is waived each month you pay in £2,000 or more.

Rachel Springall, finance expert at Moneyfactscompare, said: “Savers will need to compare regular savings accounts carefully, as some are only available to current account customers or even local customers.

“The rates being offered on these accounts can seem high, but it is important to remember that interest is calculated differently to a standard savings account.”

Related: How to get 7% interest without tying up your savings for years