In an era where savings rates often struggle to keep pace with inflation, securing a high interest rate can feel like a financial holy grail. MoneySavingExpert.com founder Martin Lewis has long championed strategies to maximize returns on savings, and one of his standout recommendations is leveraging regular savings accounts to achieve rates as high as 8%—far surpassing the typical returns of standard savings accounts. This post dives into how these accounts work, the best options available, practical tips to optimize your savings, and key considerations to ensure you’re getting the most out of your money, based on Lewis’s advice and recent updates as of July 2025.
What Are Regular Savings Accounts?
Regular savings accounts are designed for individuals who can commit to saving a fixed amount each month. Unlike traditional savings accounts that allow lump-sum deposits, these accounts typically restrict the amount you can deposit monthly (often between £50 and £300) but offer significantly higher interest rates—sometimes up to 8%. The catch? The high rate applies only to the money you deposit each month, and the interest is calculated on the growing balance over time, not a fixed lump sum. As Martin Lewis explains, “These give you higher rates, but you can only put small amounts in. They are designed for saving each month.”
For example, if you deposit £200 monthly into an 8% regular savings account for a year, you won’t earn 8% on the full £2,400 at year-end because the balance builds gradually. Instead, your average balance over the year is roughly half the total (£1,200), yielding about £103 in interest. This nuance often surprises savers, but as Lewis notes, “On every penny in there, once it’s in, you cannot beat those interest rates.”
Why Regular Savings Accounts Offer High Rates
Banks and building societies offer these accounts to encourage consistent saving habits and attract new customers, often requiring you to hold a linked current account with the institution. The high rates are a marketing tool, sometimes paired with incentives like switching bonuses (e.g., Nationwide’s £200 bonus). However, the limited deposit amounts mean these accounts are best suited for those saving smaller, regular amounts or strategically “drip-feeding” from a lump sum held in another account.
Top Regular Savings Accounts in 2025
While specific rates and providers change frequently, here are some of the top regular savings accounts highlighted by Martin Lewis and MoneySavingExpert.com as of mid-2025, along with their key features:
Nationwide Regular Saver (8% variable, linked to current account)
Max monthly deposit: £200
Annual interest: ~£103 on £2,400 saved over 12 months
Eligibility: Requires a Nationwide current account. New customers can earn a £200 switching bonus and a one-year 0% overdraft.
Key feature: No mandatory monthly deposits, offering flexibility if you miss a month.
Why choose it?: Highest rate among linked accounts, plus the switching bonus sweetens the deal.
First Direct Regular Saver (7% fixed)
- Max monthly deposit: £300
- Annual interest: ~£136 on £3,600 saved over 12 months
- Eligibility: Requires a First Direct current account.
- Key feature: Fixed rate guarantees returns, but you must deposit monthly or risk account closure.
- Why choose it?: Slightly lower rate than Nationwide but allows higher monthly deposits.
Zopa Regular Saver (7.1% variable)
- Max monthly deposit: Varies (typically £100–£250)
- Eligibility: Requires a Zopa current account.
- Key feature: Flexible deposits, with competitive rates for existing customers.
- Why choose it?: Strong option for those already banking with Zopa.
Co-op Bank Regular Saver (7% variable)
- Max monthly deposit: Varies (often £150–£250)
- Eligibility: Requires a Co-op Bank current account.
- Key feature: Variable rate, so returns may fluctuate.
- Why choose it?: Good for Co-op customers seeking high returns on smaller savings.
Principality Building Society Regular Saver (7.5% fixed for six months, open to all)
- Max monthly deposit: £200
- Annual interest: ~£50 on £1,200 saved over six months
- Eligibility: No linked current account required.
- Key feature: Short-term commitment with a high fixed rate.
- Why choose it?: Ideal for those who don’t want to switch banks or commit for a full year.
- Note: Rates and availability change, so always check MoneySavingExpert.com or provider websites for the latest deals.
Maximizing Returns: Martin Lewis’s Top Tips
Martin Lewis emphasizes strategic approaches to make the most of regular savings accounts. Here’s how to optimize your savings:
Drip-Feed Lump Sums: If you have a lump sum (e.g., £5,000), keep it in a high-interest easy-access account (e.g., 5% AER) and transfer the maximum monthly amount into a regular savings account. This way, “every penny you want to save is earning the most it can at any given moment.” For example, drip-feeding £200 monthly from a 5% account into Nationwide’s 8% saver could yield £158 total interest (£103 from the regular saver, £55 from the remaining balance) versus £118 if left in the 5% account alone.
Open Multiple Accounts: You can hold regular savings accounts with different institutions to spread your savings and boost returns. For instance, combining Nationwide (8%) and First Direct (7%) allows you to save up to £500 monthly at high rates, potentially earning over £200 annually in interest.
Act Quickly Before Rates Drop: With the Bank of England’s base rate at 4.25% as of July 2025, following a cut from 4.5%, Lewis warns that savings rates may decline further. “The safest bet is to fix today,” he advises, especially for fixed-rate regular savers like First Direct’s.
Consider Tax Implications: Most savers don’t pay tax on interest due to the Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers). However, if you’re nearing these limits (e.g., with £20,000 at 5% generating £1,000), consider a cash ISA, where interest is always tax-free up to £20,000 annually.
Combine with Switching Bonuses: Banks like Nationwide offer £200 for switching your current account, which can boost your overall returns. Ensure you meet switching criteria (e.g., paying in £1,000 monthly) to secure the bonus.
Use a Regular Savings Calculator: MoneySavingExpert.com offers a calculator to estimate returns based on monthly deposits or drip-feeding strategies. This helps you plan and avoid surprises, as interest is lower than expected due to the growing balance.
Check FSCS Protection: Ensure your savings are protected under the Financial Services Compensation Scheme (up to £85,000 per person, £170,000 for joint accounts). Spread large sums across institutions, noting that some banks (e.g., HSBC and First Direct) share FSCS licenses.
Explore Alternatives for Large Sums: If you have more than the monthly limits allow, consider fixed-rate bonds (up to 4.58% AER) or easy-access accounts (up to 5%) for larger sums, or a Lifetime ISA for first-time buyers (25% government bonus on up to £4,000 annually).
Key Considerations and Pitfalls
While regular savings accounts offer attractive rates, there are limitations to understand:
- Limited Deposits: Monthly caps (e.g., £200–£300) restrict how much you can save at high rates, making these accounts less suitable for large lump sums without drip-feeding.
- Linked Account Requirements: Top payers like Nationwide and First Direct require you to hold their current accounts, which may involve fees (e.g., Santander Edge’s £3/month) or switching processes.
- Variable vs. Fixed Rates: Variable-rate accounts (e.g., Nationwide, Zopa) may decrease if the Bank of England cuts rates further, while fixed-rate accounts (e.g., First Direct, Principality) lock in returns.
- Deposit Rules: Some accounts close if you miss a monthly deposit, while others (e.g., Nationwide) are more flexible. Always check terms to avoid penalties.
- Lower Effective Interest: The advertised 8% rate applies to the average balance, not the final amount, so actual returns are lower than expected (e.g., £103 on £2,400 at 8%).
- Tax Risks: If your total interest exceeds your Personal Savings Allowance, you’ll owe tax. Use a cash ISA or spread savings to stay under the limit. For low earners (under £18,570 total income), the starting rate for savings allows up to £5,000 in tax-free interest.
Why 8% Matters in 2025
With inflation cooling and the Bank of England base rate at 4.25%, high-rate regular savings accounts remain a rare opportunity to outpace inflation. Lewis warns that rates may have peaked, with analysts predicting further cuts in 2025. “I don’t have a crystal ball,” he says, but locking in high rates now—especially fixed ones—could protect your returns. For savers earning less than 5% elsewhere, these accounts offer a chance to “hugely increase their interest.”
Conclusion
Martin Lewis’s strategy for earning 8% interest on savings hinges on regular savings accounts, which offer unmatched rates for disciplined savers. By choosing top accounts like Nationwide or Principality, drip-feeding lump sums, and combining with switching bonuses, you can maximize returns while keeping funds secure under FSCS protection. However, the limited deposit amounts and potential tax implications require careful planning. As Lewis advises, “Check what you’re earning in savings, and if it’s anything less than 5%, it’s time to ditch and switch.” Act now to lock in high rates before they fall, and visit MoneySavingExpert.com for the latest deals and a regular savings calculator to plan your strategy.
