Written by Karen Bryan
As I trawled through savings accounts to find the highest rates of interest, I came across the Barclays Monthly Savings Account. It currently pays a fixed rate of 3.25% for a 12 month period. With the best one year fixed rate savings account paying 2.05%, the 3.25% paid on the Barclays account rate looks very attractive. The interest paid drops to 3.03% if you make withdrawals. This is only a small reduction in the rate of interest. Some other regular savings accounts don’t allow, or limit, access to your cash during the 12 month duration of the account.
The downside is that the maximum monthly deposit is £250. Remember that you only earn interest on money that’s sitting in the account. Assuming you put in the full £250 every month, the interest earned won’t be 3.25% of £3,000. more like 3.25% of £1,500, the average balance held in the account.
The other negative issue is that savers who aren’t existing customers can only open the Barclays Monthly Savings Account in a branch. Having to make an appointment to visit a branch and listen to bank sales pitches in order to open a savings account is a real pain.
Other regular savings accounts, e.g. the Norwich and Peterborough E-Regular Savings Account allow you to open an account online, so there’s obviously no reason, except for Barclays’ self-interest, for online account opening not to be an option.
Interest rates correct on 26 August 2013.