Lloyds Bank offers competitive 6.25% interest savings account

Lloyds Bank is offering Brits a competitive 6.25% interest rate on its regular savings account. It comes despite a raft of providers slashing rates following the latest Bank of England Base Rate cut to 4%.

Regular savings accounts typically require people to deposit a set amount each month and make minimal to no withdrawals. They work well for people who want to start a savings habit or disciplined savers, and typically benefit from higher interest rates than standard accounts. Savers can launch Lloyds Bank's Club Lloyds Monthly Saver with a minimum deposit of £25. The 6.25% AER interest rate is fixed for 12 months.

The deal is only available to Club Lloyds current account holders who have not already opened one of these accounts in the last 12 months, and customers must be UK residents aged 18 or over.

Savers can put away between £25 and £400 every month by one standing order. This allows for a maximum total contribution of £4,800. Based on the current rate and the maximum contribution, the account would earn £150 in interest over a year.

Unlike most regular accounts, customers can benefit from easy access to their cash, with no penalties applied to early withdrawals. Just one Club Lloyds Monthly Saver is available in a person's sole name or jointly held.

How does this account compare?

Savers can still benefit from higher interest rates despite the Bank of England's latest Base Rate cut to 4%.

For those who don't have a Club Lloyds current account and want to open a regular savings account, Principality Building Society offers the top rate of 7.5% Annual Equivalent Rate (AER). The account runs for six months, and interest is paid on maturity.

People can save up to £200 per month in the account, allowing the pot to grow to a total of £1,200. With a maximum investment of £200 per month, savers will end up with £1,227.53, including £27.53 in interest. Withdrawals are not permitted until the account matures.

Zopa offers a 7.1% AER over 12 months with a maximum limit of £300 per month, allowing savers to build £3,600 in total savings. Interest is paid at the end of the term, with a full £3,600 deposit expected to earn around £136.50. This will bring the total balance to approximately £3,736.50. Savers are allowed to withdraw money from the Zopa savings account at any time without penalty

First Direct places just behind with a 7% AER over 12 months. The account allows a higher deposit of £300 per month, which totals up to £3,600 in savings over the course of a year. At the end of the term, savers will have £3,736.50, including £136.50 in interest.

With this account, savers must feel confident they won't need to dip into their pot, as withdrawals are not allowed until the term matures.

Following the Bank of England's latest Base Rate cut to 4% last Thursday, savers are being urged to lock in higher interest rates while they're still available. Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: "Savers will feel frustrated to see an abundance of providers cut rates since the Bank of England Base Rate cut. More than 20 providers have cut since last Thursday. Over the past week, the Moneyfacts Average Savings Rate has dropped from 3.50% to 3.47%.

"Savers need to keep a close eye on the market for any vanishing accounts and ensure they abandon their loyalty if it is not being rewarded with a decent savings rate."