Just one in three instant access savings accounts offers monthly interest on deposits with no restrictions or bonuses, despite millions of savers relying on their accounts for income, new analysis shows.
The research from Investec Bank, which offers the option of monthly interest on its instant access and notice account, found 15 of the top 50 easy access accounts offer the option of interest being paid monthly to savers with no restrictions or bonuses.
A further six accounts offer monthly interest but limit withdrawals while another three rely on bonuses to boost the rate they pay. The other 26 accounts in the top 50 – more than half the total – analysed for Investec Bank by Andrew Hagger of Moneycomms only offer annual interest.
A separate new study by Investec Bank shows that almost half (42%) of savers who receive monthly interest on their accounts say the money they earn is important to them when paying bills. This includes around one in five (18%) who say it is extremely important when meeting bill payments.
Investec’s research found slightly more savers take the interest on their cash savings monthly compared to annually. Around 45% receive monthly intertest while 41% take it annually. However one in seven (14%) say they don’t know how they receive interest on their savings.
Nearly two out of three (64%) Britons who receive monthly interest on their savings say they have always done so. Around one in five (18%) say they only started doing so either during the COVID-19 pandemic or since the cost-of-living crisis began.
David Hunt, Head of Retail Savings at Investec, said:
“Receiving monthly interest on cash savings is clearly very important to millions of savers when paying their bills, so it is crucial that people look for a mix of accounts that enable them to manage their money in the way they want.
“Instant access accounts offer flexibility while fixed rate accounts generally offer higher rates but restrict access for a set period and mainly pay interest annually. Notice accounts can also offer higher rates while restricting access but will often pay monthly interest.
“Our research shows however that too many instant access accounts either do not offer the option of monthly interest, place restrictions on withdrawals or rely on bonuses to boost headline rates which can make it confusing for savers looking for the best account for their circumstances.”
Interest on Investec’s instant access Online Flexi Saver and its 90-Day Notice Saver is calculated daily and paid monthly. The latter offers a higher interest rate than instant access in exchange for 90 days’ notice on withdrawals.
The range of accounts, which do not have any penalty fees or hidden bonus rates, also include the Fixed Rate Saver account offering 1-Year, 2-Year or 3-Year terms for customers willing to lock money away.
Investec’s Online Flexi Saver is a simple and secure instant access savings account. It pays an interest rate of 4.70% AER* monthly on balances of between £5,000 and £250,000, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account.
The Investec 90-Day Notice Saver pays 5.25% AER* on balances of between £5,000 and £250,000. It also offers unlimited deposits with withdrawals subject to a 90-day notice period.
The Fixed Rate Saver provides simplicity and security for savers and pays an interest rate of 4.85% AER* over a one-year fixed term, 4.70% AER* over a two-year term or 4.45% AER* over a three-year term on balances of between £5,000 and £250,000. Interest is paid on maturity on the 1-Year and annually on the 2-Year and 3-Year. No withdrawals are permitted until the end of the term, and no further deposits can be made after the first seven days.
For more information on Investec’s savings products, visit: https://savings.investec.com/
