Regular Savings Accounts Earn up to 6% on your savings

Don't believe the best buy tables - it's possible to earn 6% interest on savings. Regular Savings accounts are a hidden species that pay big as long as you feed them every month.

This step-by-step guide includes all best buy regular savers, plus tricks to help you maximise your interest.

What are regular savings accounts?

The clue's in the name. Regular savings accounts require you to put money away each month. They offer blockbuster interest rates, but tend to impose rigid terms and conditions, such as limiting the amount of withdrawals you can make, or forcing you to make a deposit every month.

How can they pay such huge interest rates?

Often these accounts only last a year, and there are strict limits on the amount you can save. Banks commonly use them as advertising tools, promising eye-catching interest rates, in order to grab your custom in the hope of flogging or forcing you to have their other products too.

Once it ends, your cash sweeps into a bog-standard account. Note the date, then ditch 'n' switch to a better deal immediately.

How does the interest work?

One point to note is that the interest received will be around half the interest rate of the account as the money is being saved monthly rather than in one lump sum. To maximise your overall interest, use the dripfeeding technique below.

When are they worth using?

While for pure interest rates, the top regular savers are unbeatable, they are taxed, meaning basic rate taxpayers lose 20% of any interest earned, higher rate 40%. This means, for many, the returns won't be as good as putting the cash in a tax-free Cash ISA; plus, if you don't use your �5,640 ISA allowance in a tax-year, you lose it.

Usually the right strategy is first fill your ISA each year, and once that's done, plump for the best regular savers (for more info, see the Where to Start Saving guide). Yet occasionally a regular savings account will pay so much, it can beat even the top untaxed ISA. The calculator below will help you compare.

How safe are your savings?

Bank collapse was once easy to dismiss, then the credit crunch and global market turmoil hit. The UK soon found itself bailing out Northern Rock, and the US authorities followed for even bigger bank Bear Stearns. These days, every sensible saver should ask "is my money safe?"

The answer is simple. Provided your money is in a UK-regulated bank or building society account, it's protected under the Financial Services Compensation Scheme (FSCS). Here's the golden rule.

The first �85,000 per person, per financial institution is guaranteed.

Sadly this is the simple face of savings safety. The exact rules are more complex, involving how different banks are registered and what counts as a financial institution. For full info, read the full Are My Savings Safe? guide.

How to maximise safety

With regular savers, often there's no problem at all. Limits on the amount you can deposit usually mean the balance of the account gets nowhere near �85,000, so there's no problem.

Yet for regular savers which let you deposit more than that, or if you have savings in other accounts with the same bank, for total peace of mind don't put more than �85,000 in any one institution; spread it around.

For those with very large amounts of savings (for example, from a house sale) this could lead to lots of accounts. Even if you've too much to stick to the �85,000 limit for each one, the general rule of not having all your eggs in one basket still works. For more info, see the how to get 100% safety section of the Savings Safety guide.

This guide and best buys

It's impossible to pick "which bank is in trouble?". We've seen great names of world banking like Goldman Sachs and Merrill Lynch in trouble. Therefore the only solution for this site is that we'll report the top rates regardless, alongside explaining any protection oddities. So far, world governments have reacted to protect their banks and no savers have lost money, and it's likely (though not certain) that will continue.

Top rate accounts (but need bank account)

The top-paying regular savers come with a big 'but' attached - you must also hold or switch to the same bank's current account. Happily, at the moment the best current accounts for new switchers also offers the highest regular saver rate.

6% for First Direct customers No withdrawals or missed payments, save up to �300/mth

• Promo Rate: 6% AER fixed for 12mths.
• Monthly Deposit: �25 - �300
• Make withdrawals? No
• Miss a payment? No
• Access: Online and by phone
• Protection: Shared �85k FSCS (see Safe Savings)

First Direct current account customers, with its 1st Account, can get its Regular Saver, paying 6% AER fixed for a year. This allows deposits between �25 and �300 each month, via standing order from your First Direct bank account.

A big plus is that the First Direct* 1st account is one of our top picks. New customers get a �100 bonus, earned by depositing at least �1,500 a month; plus it's the outstanding customer service bank, with 91% voting it great. It pays no in-credit interest, and the overdraft rate is 15.9% - full info in the Best Bank Accounts guide.

The Regular Saver doesn't allow any missed monthly deposits or withdrawals, although you can reduce payments to the minimum in any month. If you do make a withdrawal before a year is up, the account will close and you'll get just 0.5% on all money saved.

The maximum balance allowed increases monthly by �300. If you deposit �100 in month one, you could deposit �500 in month two (as the max balance allowed will be �600). Technically, in the final month, you could deposit �3,600 minus the amounts you've already put in, though as the rate's paid daily, you'd miss all the benefits.

4% for HSBC customersNo withdrawals or missed payments, save up to �250/mth

• Promo Rate: 4% AER fixed for 12mths.
• Monthly Deposit: �25 - �250
• Make withdrawals? No
• Miss a payment? Yes
• Access: Branch & Phone
• Protection: Shared �85k FSCS (see Safe Savings)

The HSBC Regular Saver pays 4% AER if you have the normal Bank Account or Graduate Account. These are free to hold, though you must pay in at least �500 a month. You can deposit �25 - �250 a month into the Regular Saver, up to a maximum of �3,000 a year and you're allowed to miss deposits.

Back in January, we mentioned the HSBC Bank Account in our Best Bank Accounts guide. At the time it offered 6% AER in-credit interest on balances up to �2,500.

The maximum balance allowed increases monthly by �250. If you deposit �50 in month one, you could add �450 in month two (as the max balance allowed will be �500). Technically, in the final month, you could deposit �3,000 minus the amounts you've already put in, though as the rate's paid daily, you'd miss most of the benefits.

If you have one if its fee-paying accounts you'll be eligible for an 6% AER regular saver. Not one of our top picks, but it's a good option if you're already a happy customer.

Most flexible, incl unlimited withdrawalsSaffron BS 4% AER fixed for 12 months. Branch & post

• Promo Rate: 4% AER fixed for 12mths
• Monthly Deposit: �10 - �200
• Make withdrawals? Yes, unlimited
• Miss a payment? Yes
• Access: Branch & Post
• Protection: Full �85,000 FSCS (see Safe Savings)

The Saffron BS 12 month fixed-rate regular saver (issue 2) pays 4% AER and lets you save between �10 and �200, but the real bonus here is that you can make unlimited withdrawals for no penalty.

This account is only available to existing Saffron customers, so you must have held �100 or more with them for a year, or have a Saffron mortgage.

The account can be opened and operated in branch or by post. The balance must remain above �10 or you'll get 0.05% AER, though once the balance goes back over �10 the rate will revert to 4%. You get the interest once the year-long fixed period is up.

The top open-to-all accounts

If you don't have the current accounts necessary to unlock the big-paying accounts above, check out the top open-to- all accounts that aren't linked to other products. There are no restrictions on how many regular savings accounts you can have and, as they all limit the amount of cash you can put away, you may want to use more than one.

Top online account, includes one withdrawal Norwich & Peterborough BS 4% AER for 12 months

• Promo rate: 4% AER fixed for 12mths
• Monthly deposit: �1 - �250
• Make withdrawals? Yes, 1 per year
• Miss a payment? No
• Access: Online only
• Protection: Shared �85k FSCS (see Safe Savings)

The Norwich & Peterborough BS E-Regular Saver is available online and pays a fixed rate 4% AER for a year including 1.5% bonus. You can save between �1 and �250 each month and can make one withdrawal per year.

If you miss any payments or make more than one withdrawal, you'll lose the 1.5% bonus for the whole year, dropping the rate to an okay 2.5% AER. The account can be opened and accessed online only.

Decent rate, even in months you make withdrawals Barclays 3.25% AER for 12 months

• Promo rate: 3.25% AER fixed for 12mths
• Monthly deposit: �20 - �250
• Make withdrawals? Yes - 0.22% interest penalty
• Miss a payment? No
• Access: Branch
• Protection: Shared �85k FSCS (see Safe Savings)

The Monthly Saver from Barclays* pays a fixed rate of 3.25% AER for a year and is available in branches. You can save between �20 and �250 each month.

In any month you make withdrawals, you'll get 3.03% AER the following month, which is still a good rate. You can miss payments and change the amount you pay as long as it stays between �20 and �250 a month.

If you're an existing Barclays current account holder, you can open and access your account online and by phone too.

6% if you've got childrenHalifax, great rate but max �100 monthly deposit

• Promo rate: 6% AER fixed for 12mths
• Monthly deposit: �10 - �100
• Make withdrawals? No
• Miss a payment? Yes
• Access: Branch
• Protection: Shared �85k FSCS (see Safe Savings)

The Halifax Kids' Regular Saver pays 6% gross interest fixed for a year, however you can only deposit a maximum of �100 per month. No withdrawals are allowed, but you can miss monthly deposits.

Applications can only be made in Halifax branches - this account is not available via the Bank of Scotland.

The account must be opened by an adult in the child's name. If, as is usual, your child doesn't earn enough to pay tax, it's tax-free (a full explanation of children's account tax is in the Best Child Savings guide).

Local building societies often offer good rates too, so keep your eyes peeled in branches. At the moment Cheshire, Dunfermline and Derbyshire Building Societies (all owned by Nationwide) offer 5% AER on their branch-only Platinum Monthly Saver account.

Don't believe the bad press

Sadly, regular saver accounts often receive negative publicity due to a flawed understanding. Many people say they've used regular savers, but only received around half the interest they thought they would. Yet that's because they expected the wrong amount, not because they were underpaid. Here's a wee example...

Dripfeeding: How to maximise the interest

The problem with regular savings accounts is it takes time to build up the amount of money you have in there. So while they promise high interest, this is often just on a small amount of money. Yet if you have a lump sum of cash, and you want to maximise its earnings, you can still take advantage.

• Put the lump sum in the top normal savings account

  Put the lump sum you wish to save in a normal savings account paying as much interest as possible (see Top Savings Accounts).

• Pay the money into the regular saver from the savings account

  Now make payments into the regular saver straight from your normal savings account each month, instead of from your current account. Not all savings accounts allow this, so check before you set the account up (you may have to move the cash to a current account first, then to the regular saver).

This technique is called 'drip-feeding', as you're slowly moving your cash across, month by month. This means every penny you want to save is earning the most it can possibly do at any one moment. Here's how it should work in practice. Let's take the same �3,000 savings as in the Mr Matt Mattics example above...

To get the maximum gain, put as much in as possible in the early months, but always ensure you've enough left to keep up the minimum payments for the account's lifespan. Then you've got as much interest as possible, while meeting the account's terms and conditions.

The Regular Savings Calculator

Below is a special calculator designed to help you work out what you'll earn from Regular Savings. It has two options...

1. Regular savings only. Choose this if you want to know how much you'll get from a Regular Saver alone.

2. Drip feed calculator. If you want to save a lump sum, and are using the drip feed route above, this will tell you how much you get, and compare it with keeping the money in your normal savings account.

How much will you save each month? �

What�s the interest rate? (before tax) %

How long will you save for? years and months time.

How much tax do you pay? No Tax Basic Higher Additional

How far ahead do you want to look? years and months time.

How much tax do you pay? No Tax Basic Higher Additional

NORMAL SAVINGS ACCOUNT

What's the interest rate before tax? %

How much do you have saved in there? �

REGULAR SAVER

What�s the interest rate before tax? %

How much will you pay in each month? �

For the most accurate answer, use the AER (Annual Equivalent Rate) which should be listed on your statement. Remember, most normal savings accounts are variable rates, so the drip feed calculation will change if the rate does � but it's a good indicator of the returns.