Savers who are prepared to make monthly contributions to a regular savings account rather than using an instant access savings account can get 'better rates' on their savings, Moneyfacts.co.uk has revealed.
Moneynet.co.uk has found that the average interest earned on an instant access savings account is just under 0.75 per cent, while some of its 'best buy' regular savings accounts offer annual rates of up to five per cent.
Its findings suggest that a basic rate taxpayer with savings of £3,000 in an instant access savings account will earn £2.40 in annual interest, compared to nearly £52 if they deposited £250 per month into a regular savings account paying four per cent.
Commenting, Andrew Hagger of Moneynet.co.uk, believes it is important that consumers explore alternative savings deals in a bid to get a "half decent return on their cash".
"There are better rates, often fixed, available if you're prepared to consider putting a regular sum of cash away on a monthly basis. Whilst it may seem like too much hassle, in reality it's pretty straightforward and a few minutes work can see you handsomely rewarded," he said.
Mr Hagger claims that it is possible to earn more than three times as much annual interest by using a regular savings account, when compared to the average instant access account.
"Regular Saver accounts are not just for people looking to build their first savings nest egg but also provide a way of boosting interest income for those who already have some cash put by," he said.
Although acknowledging that some savers may avoid these types of accounts because of their "fairly rigid terms and conditions", he suggests this may provide the encouragement some consumers need to start saving.
"The downsides of these accounts are that the amount you can save on a monthly basis is limited (usually a maximum £250 per month) and access to your cash is not permitted without penalty or closure of the account, however if you're aware of this from the off, then the rewards more than outweigh the account restrictions.
"For a new saver they provide the extra discipline which may prevent them giving up too easily on the very important habit of saving regularly," he said.
© Fair Investment Company Ltd