Saffron BS launches regular savings account with 9% rate

Saffron Building Society has launched what appears at first glance to be a market-leading savings account with an inflation beating rate of 9 per cent.

Hot on the heels of Skipton launching a 7.5 per cent deal, the Members’ Month Loyalty Saver is an exclusive savings account designed to reward its loyal customers who have been with the mutual since 1 June 2022.

Eligible customers can open the account online or in branch and keep a minimum of £1 in their account to get the interest rate.

The 9 per cent rate is fixed for 12 months with all interest being paid at the end of the term. However, there is a huge catch – only £50 per month can be saved into it. 

Headline grabbing: Saffron Building Society has launched a limited edition, market-leading savings account with an inflation-beating interest rate of 9%

Unlike some regular savings accounts, customers can take money out once a month. This means they can also close their account anytime. 

Colin Field, chief executive officer at Saffron Building Society said: ‘We have introduced this chart-topping product to coincide with the launch of our first Members’ Month. 

‘The Members’ Month Loyalty Saver has been developed to show big support to our small savers.

‘Members are the heart and soul of the society and we are delighted to have this opportunity to reward, surprise, and delight them.’

This headline grabbing deal does however come with a major catch – the maximum limit is low by the standards of most regular savings accounts. 

Savers can only put in a maximum of £50 each month. A total of £600 over the 12 month fixed term.

This means the headline rate may not turn out to be as lucrative as some may assume. 

Even if a saver put in the full £50 each month which would amount to £600 over the course of one year, it means that despite the astonishingly high interest rate they will only have earned £29.25 by the end of the 12 months.

If someone was able to simply put £600 into the best easy-access deal paying 3.85 per cent, at the start of the year, they will earn £23.10 in interest.

Should you sign up?

To start with, this savings deal will only be available to a few people. Saffron Building Society currently serves around 100,000 members across the UK with a range of competitive mortgage and savings products.

For those who are elligible, it will be great for anyone drip-feeding and getting into the savings habit.

Essentially, for anyone who is aiming to save up to £50 a month, this is a great option.

However, many will likely feel rather restricted by the £50 maximum monthly limit.

Although the 9 per cent rate is the market leading deal, there are other regular savings accounts that are much more generous when it comes to how much savers can pay in each month.

Skipton Building Society pays 7.5 per cent and allows for savers to put in up to £250 each month for a year.

Both Lloyds Bank and First Direct regular savings account also give customers the potential to accrue much more interest, because they allow for higher monthly deposits, despite the lower headline rate on offer.

For those who have even larger savings pots, it may make sense to consider an easy-access savings account or fixed rate account. 

Check out the best easy-access savings accounts and fixed rates deals here. 

James Blower, founder of the website, The Savings Guru says: ‘It’s a lovely headline rate but the fact it is capped at £50 a month means that savers putting in the max will only get £29.25 of interest, which for many may not be worth the hassle of setting it up. 

‘If you are a Saffron member, on a low income, it’s a decent way of getting a nice emergency fund going and worth doing but otherwise it’s probably not more than a nice thank you for existing members.