Best Monthly Income Accounts

Santander is one of the best monthly income account providers in the UK, offering a high 5% interest rate on their Regular eSaver Account plus several cashback benefits. The Regular eSaver account works alongside a Santander 1|2|3 current account which presents you with several cashback benefits on household bills:

• 1% cashback on council tax and phone bills,

• 2% on gas and electricity bills,

• 3% on water bills.

All of these make you stand a chance of earning as high as £15 extra monthly or £180 in a year as cashback.

Interest is calculated daily but earnings are restricted to just £200 per month. No minimum monthly deposit is required so you can expect to earn interest for any amount you deposit by standing order.

To be eligible for the Santander 1|2|3 regular saver account, you must be 16 years old or older, be signed up for online or mobile banking, and fund the account through a standing order from a Santander current account.

You can only have one regular saver account with Santander so if you already have one regular saver account and wish to switch to the 1|2|3 regular saver account, you must close down the previous one.

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	Santander	7.5	Visitsantander.co.uk

HSBC's focal perk is its excellent customer service and a consistently high rating from past and present customers. HSBC offers its users a unique experience that promises ease and satisfaction for every account they open and the regular saver account is no exception.

With just £25 in your HSBC Regular Saver Account, you can start earning 5% interest on your monthly deposits. HSBC lets you set a standing order to the regular saver account using an existing HSBC account. You can pay between £25 and £250 monthly into the account while you continue to earn interest daily.

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	HSBC	6.8	Visitwww.hsbc.com/

The main reason why Natwest’s Savings Builder Account made it to our list is that you can earn interest for any amount you deposit in the account. Not only that, your interest earned increases as the amount you deposit increases!

You earn about 1.90% monthly interest on amounts between £1 and £10,000 after your first deposit. When increase your balance with £50 or more, your earnable interest increases to 4.5% on amounts between £1 and £10,000.

You earn 1.95% on amounts over £10,000. Your interest is calculated daily and paid to your account on the first day of every month.

To be eligible to open the Natwest Savings Builder Account, you must be aged 16 years or older and should already hold a Natwest international current account.

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Nationwide is our best overall pick for monthly interest accounts. The FlexDirect account offers a monthly 5% interest on your money plus several other features that make it highly competitive. There are no monthly fees to worry about and once you open the account, you become a Nationwide member, gaining access to exclusive savings accounts like the Flex Instant Saver.

The 5% monthly interest is equivalent to 4.89% gross in a year. Interest is paid on balances as high as £1,500 which is one of the highest for monthly interest accounts. TSB, which offers a similar AER, only pays interest on a maximum deposit of £250 only. So you can expect to earn around £50 to £75 as monthly interest, summing up to a total of about £600 to £900 per year.

You would however need to maintain a minimum monthly balance of up to £1,000. The 5% interest is only active for the first year after which the AER becomes 0.25%. Your interest will be paid on the first day of the next month.

To be eligible to open a FlexDirect account, you must be a UK resident, aged 18 or over, willing to use the account only for personal use, and not have more than 4 existing Nationwide Current accounts.

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	Nationwide Bank	7.2	Visitwww.nationwide.co.uk/

TSB offers you the opportunity to earn as high as 5% on your monthly deposits for one year through the TSB monthly saver account. The account is open to all who have a TSB current account through which they can set up a standing order of £25 to £250 into their monthly saver.

Although you can deposit as much as £30,000 into the account, interest will only apply for up to £250. Interest is calculated every day and will be added at the end of the 12-month term after which only an interest rate of about 1.00% to 1.10% will begin to apply.

To be eligible for the TSB monthly saver account, you must have a TSB current account, be 16 years or older, and must be a UK resident.

Note that if you close your saver account before the end of the 12-month validity term, you will not be able to open another until 12 months have expired for the initial account you opened.

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First Direct’s Regular Saver Account might have the highest earnable interest (7%) of all the bank accounts we have reviewed, but we love the bank first for its highly attractive bank switch incentive for switching to the 1st Account.

The Regular Saver Account is only available to those who own a 1st Account with First Direct. So if you don’t have one with First Direct before, you could switch to it and enjoy a £175 switching bonus while also opening the regular saver account to benefit from the juicy 7% AER – double win for you!

Interest applies on up to £300 you save in your regular saver account monthly. Your interest is calculated daily and will be paid at the end of the term. Payments into the account can only be made by standing order from your 1st Account.

You can, however, change the among of your standing order at any time to any amount between £25 and £300 as long as the amount is in a multiple of 5. Note also that you can only make a standing order payment to your account once a month.

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Think of all the possible freebies you can get on a bank account that also earns you interest – Lloyds Bank lets you have it all. From the high 6.25% AER to the yearly lifestyle benefit having a Club Lloyds account makes you eligible for.

These freebies include cinema tickets, magazine subscriptions, dining offers, and a Disney+ subscription. When you open a Club Lloyds current account (which you need to open a monthly saver account), you get to benefit from any of these offers of your choice.

To earn interest from the monthly saver account, top your account with £25 to £400 through standing order or bank transfer before the 25th day of every month. You can send money to the account as often as you want in a month as long as you don't exceed the £400 monthly limit.

You can either have your Club Lloyds Monthly Saver Account solely or as a joint account. To be eligible for the account, you must hold a Club Lloyds current account, be 18 or older, and must be resident in the UK.

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	Lloyds Bank	7.5	Visitwww.lloydsbank.com/

A monthly income account might not offer extensive features as with basic bank accounts. Still, you can do reasonably much with it, including performing basic functions like withdrawing and transferring your money and even using it for foreign transactions.

Here is a list of things you might be able to do with your monthly income account:

✔️ Earn interest on your savings

✔️ Deposit money into the account

✔️ Set up automatic deposits and standing orders for the account

✔️ Withdraw money from the account (although some accounts may have restrictions on how often you can withdraw or may charge a fee for early withdrawals)

✔️ Transfer money between accounts

✔️ Monitor your account online or through banking apps

✔️ Receive electronic statements or paper statements

✔️ Use the ATM for withdrawals

Note that what exact activities you can perform with your monthly income account would vary across banks. For example, some accounts allow for unlimited withdrawal while some have monthly withdrawal limits.

Still, some won’t allow making any withdrawal until the end of a one-year term. Most banks will also have specific regulations on how you can deposit money into your monthly income account.

Generally, you should note that a monthly income account wasn’t created for daily transactions. It is a savings account and is therefore not ideal for frequent withdrawals, transfers, or foreign transactions.

With a monthly income account, you usually cannot:

❌ Write cheques from the account (although some savings accounts may offer check-writing privileges for a fee)

❌ Use the account for everyday spending, as savings accounts are designed for long-term savings and not for day-to-day transactions

❌ Overdraw the account, as savings accounts rarely come with overdraft facilities

❌ Use the account as collateral for a loan or credit card

❌ Deposit foreign currency (unless the account is specifically designed for this)