Bank offers competitive savings account with bumper 7% interest rate

As UK rates continue to fall after another cut to the , the Co-operative Bank's Regular Saver remains competitive, offering savers a near market-leading 7% interest.

Although not a new deal, the Regular Saver (Issue One) remains one of the most generous options currently available. Customers can start saving with as little as £1, with interest paid annually at the end of the 12-month term. Monthly deposits are capped at £250, allowing for a maximum total contribution of £3,000. Based on current rates, that would earn £114.21 in interest over a year.

The account is available to UK residents aged 16 or over who hold a Co-operative Bank current account. For joint applications, only one applicant needs to meet this requirement.

This account is more flexible than what's typically expected from a 'regular' savings account, as withdrawals can be made at any time without penalty online, by phone, in a branch, or via cheque.

Regular savings accounts typically require people to deposit a set amount each month and make minimal to no withdrawals. They're great for disciplined savers who want to build their savings over time and benefit from higher than standard accounts.

What else is out there?

Principality is topping the table for regular savers with an Annual Euivalent Rate (AER) of 7.5%. The account runs for six months, and interest is paid on maturity.

Savers can invest up to £200 per month, allowing the pot to grow to a total of £1,200, and withdrawals are not permitted until the account matures. So, while it may have a market-leading AER, its six-month term limits the total interest earned.

With a maximum investment of £200 per month, savers will end up with £1,227.53, including £27.53 in interest.

First Direct places just behind with a 7% AER over 12 months, with a higher limit of £300 per month and up to £3,600 in total savings.

At the end of the term, savers will have £3,736.50, including £136.50 in interest. Although the with First Direct is lower, the longer term and higher deposit limit make it a potentially better option for larger savings than both Principality Building Society and The Cooperative Bank.

Following the Bank of England's latest Base Rate cut on Thursday, savers are being urged to look "beyond the high street" to secure better-paying accounts while are still high.

Sally Conway, savings expert at Shawbrook Bank, said: "With the Bank of England cutting , savers may feel the pinch, but this doesn't mean it's time to settle for less. In fact, with rates lowering across the board, now more than ever it pays to look beyond the high street. Specialist providers often offer some of the best rates available yet remain one of the best kept secrets in savings.

"Our research shows that one in eight savers have already encouraged others to switch from traditional providers to specialist banks for better returns. Now's the time to be proactive. Don't let your savings get left behind - explore your options and make sure your money's working harder, especially when inflation is still a concern."