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(Alliance News) - NatWest Group PLC has unveiled a new account with a market-leading 3% interest rate to help customers kick-start a savings habit.
Customers can put between GBP1 to GBP50 per month into the Digital Regular Saver account and will need to set up a standing order at account opening.
Interest is paid monthly, with the 3% variable rate paid on balances of up to GBP1,000. A 0.01% rate is paid on balances over GBP1,000.
The account has been designed to help customers with little or no savings currently to build a buffer, which could be useful as households deal with economic uncertainty.
NatWest said that in the months following the initial Covid-19 lockdown, more than 400,000 customers grew their savings to GBP100 or more for the first time.
The bank is aiming to help an additional two million customers to start saving by 2023 and increase financial capability.
The account is instant access – so customers can dip into it if they need to get their hands on the cash. It is available through the bank's app or online, without the need to close it.
People need to have a NatWest current account if they want to open the savings account. They can open both at the same time if they do not already have a NatWest current account.
Lewis Broadie, a savings expert at NatWest, said: "During lockdown many of our customers started to save for the first time.
"We are introducing the new Digital Regular Saver to help our customers start and maintain a long-term savings habit which will help them to become more financially secure."
The launch provides some better news for savers, after savings giant NS&I announced this week that it is cutting several of its rates, including the Premium Bond prize fund.
Rachel Springall, a finance expert at Moneyfacts.co.uk, said NatWest's rate is market-leading for this type of deal.
She said other accounts on the market include a fixed-term regular saver account from HSBC which pays 2.75%.
The HSBC account allows people to save up to GBP3,000 at a 2.75% interest rate that is fixed for 12 months – but with this account savers will need to be prepared to keep their money in for a year.
Springall said of the NatWest account: "It's great to see such a competitive rate for savers looking to kick-start the savings habit and after the lockdown there may well be consumers who have some disposable cash spare to save.
"On the other end of the spectrum, there may be consumers who wish to start up a savings pot in light of the uncertainty surrounding the coronavirus pandemic.
"The gross interest rate of 3% would be limited on balances up to GBP1,000 and the maximum deposit is GBP50 per month, also as it is a variable rate it can change.
"All in all this account may attract savers who want to put aside a bit of cash each month but also have the option to dip into their savings if they so wish."
Sarah Porretta, strategy and insights director at the Money and Pensions Service, said: "Financial wellbeing underpins overall health and happiness, and lacking a savings buffer can leave people vulnerable to changes in their circumstances and spiralling into debt.
"We're asking the whole country to get behind our goals to help millions of people make the most of their money and pensions, which is even more important in the wake of the Covid-19 pandemic, and it's exciting to see innovative new products being offered in support of these aims.
"We look forward to seeing how effective this approach is at helping people to get into the savings habit."
source: PA
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