Written by Karen Bryan
At first glance I thought that the Leeds Building Society Regular Savings Account looked quite promising. As long as you made a payment of between £20 – £500 every month and no more than one withdrawal during the period 1 March to 28 (29 in a leap year) February, you would earn a bonus of 3% on top of the tiny 0.05% underlying rate.
The maximum monthly payment of £500 into the Leeds BS is higher than in many other regular savings accounts e.g. it’s a maximum of £250 a month with both the Norwich and Peterborough E-Regular Savings Account and the Barclays Monthly Savings Account.
However, both the bonus and the underlying rate are variable. If the 3% bonus was a fixed rate, the Leeds Building Society Regular Savings Account would be much more appealing. I don’t like the idea of being tied into a restricted access savings account for twelve months in case the Leeds reduces the rate of interest paid on the account.
My approach would be not to withdraw any cash unless the rate dropped. Then I could withdraw the bulk of my cash (the minimum operating balance is £20), without losing the bonus, and reduce my monthly payment to the minimum of £20 for the remainder of the twelve month period.
The other aspect of the account that I don’t like is that you can only open the account at a branch or by post, but not online. You can open other savings accounts offered by the Leeds BS online, so why not their regular savings account?
Rates of interest correct on 13 September 2013.