Yorkshire Building Society has launched a new First Home Saver account to give homeowner hopefuls the opportunity to save regularly towards a deposit for their first property. The regular savings account has a variable interest rate of five percent and can be opened in branches, agencies and online.
Customers can deposit up to £500 per month for two years, enabling access to their savings once annually without penalty. The account also allows for closure if needed.
The mutual introduced the account to “help real-life happen” and assist people in building their financial resilience while helping more people get their first foot on the property ladder.
New research released by Yorkshire Building Society showed that almost a third (32 percent) of 18 to 24-year-olds were currently saving towards buying a home.
The new savings account is launched alongside the mutual’s new £5k Deposit Mortgage product, enabling first-time buyers with a £5,000 deposit to be considered for a mortgage of up to £500,000.
Pete Lewis, senior savings proposition manager said: “Following the launch of our new mortgage product to help support people to achieve their homeownership dreams, we want to ensure we are also helping people to save and achieve that £5k deposit in the first place.
“Regular savings accounts are one way we can encourage our members to establish healthy savings habits as well as save for their dreams and goals.
“We’re really proud that this new account, while promoting saving little and often also offers a competitive return and supports would-be homeowners build towards a deposit.”
But while Yorkshire Building Society may be offering an attractive deal, it doesn’t quite top the table for regular savings accounts.
Online bank first direct is offering an AER of seven percent. The rate is fixed for 12 months and Britons can get started with just £25.
Interest is calculated daily and paid on account maturity exactly one year after opening. Savers can deposit between £25 and £300 per month in multiples of £5.
Withdrawals are not permitted throughout the 12-month term. In this event, the account will have to close and interest will be paid up to the closure date at the Savings Account variable rate instead.
The Co-operative Bank joins the top two, also offering a seven percent AER on its Regular Saver Issue One.
Savers can deposit up to £250 a month and up to £3,000 can be invested in the account over the 12-month term. Interest is paid on maturity and withdrawals are permitted without penalty or notice.