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Yorkshire Building Society launches top 5% savings account

Paloma Kubiak
Written By:
Paloma Kubiak

Yorkshire Building Society has launched a market-leading regular savings account paying 5% interest, but it’s not open to all.

The mutual’s Loyalty Regular Saver/eSaver pays an interest rate of 5% AER/Gross (variable) on deposits of between £10 and £500 a month.

Based on the maximum £500 per month deposit, savers can earn £162 in interest over the year.

The account also allows money to be withdrawn penalty-free once during the year, or if a customer decides to close the account.

Customers can withdraw any amount from the account, but the minimum £10 balance must be maintained. If savers miss a monthly pay-in window, the amount can’t be carried over and catch-up deposits can’t be made.

After 12 months, it will revert to an off-sale maturity account – Six Access Saver – which currently pays 1.15%.

Top-paying but restricted eligibility

The society’s offering takes it to the top of the regular savings league, way out in front of the next best – First Direct’s 3.5% offering.

As well as having a higher interest rate, Yorkshire has a higher maximum deposit amount than First Direct’s £25 – £300 a month limit. And to get the 3.5% product, customers need to have a First Direct 1st Account to be eligible. It also doesn’t allow any withdrawals during the 12-month term.

However, while it trumps rivals’ products, Yorkshire Building Society’s offering is aimed at existing customers who either save or have a mortgage with it. It has three million customers but it said two million will be eligible to open the regular savings product.

Eligible applicants include those with Shareplans, as well as customers from its other brands – Chelsea Building Society and Norwich & Peterborough Building Society.

Existing customers must have had a continuous membership for at least 12 months before applying for the Loyalty Regular Saver. It can be opened in any of its 113 branches, and at 116 agencies where it has partnered with businesses such as estate agents and solicitors, while those who already hold an account and are registered online can open it online.

Hayley Tepliakov, senior savings proposition manager at Yorkshire Building Society, said: “Our founding purpose as a building society is to help people build financial resilience and get the best value on their savings so we’re committed to exploring ways that can help our members reach their financial goals or save for the future.

“Regular savings accounts are one way we can encourage our members to establish healthy savings habits. We’re really proud that this new account, which comes with a highly competitive interest rate and a generous monthly deposit limit is another example of how we reward the loyalty of our valued savers. Previous issues of this account have proved popular with savers and we’re sure this latest edition will be equally as well received.”

Other ways to net 5% interest on your cash

Away from regular savings accounts, Nationwide Building Society has recently increased the in-credit interest offered on its FlexDirect from 2% to 5% AER. The deal is for new customers but the rate is only available on up to £1,500 for the first 12 months.

Meanwhile, American digital challenger, Chase by JP Morgan also pays 5% to savers who opt-in to round-up their debit card spending to the nearest £1. Chase will autosave the difference and pay 5% interest on the amount for a year. However, due to demand, it was forced to operate a waiting room, though this has now been lifted. But it may still take longer to open an account than you would usually expect.

Related: See YourMoney.com’s How to get 5% interest without tying up your money for years for more information.