A new savings account earns 1% interest with a monthly raffle: is it worth it?
Yorkshire Building Society has launched a new savings account with a twist. Although at first glance it looks like any other regular savings account, it also allows account holders to participate in a monthly raffle.
So if you are a saver, is the account worth opening? We’ll take a look.
How does the Yorkshire Building Society Savings Account work?
Yorkshire Building Society Create me a Saver account pays 1% variable interest AER. It works like a regular savings account, which means you can add money to the account every month.
With the account, you can deposit up to £150 per month until 31 January 2023. This means you could have a total of £1,950 (excluding interest) if you save the maximum each month until this “date”. maturity”, as long as you do not make any withdrawals.
As for withdrawals, you can withdraw money as often as you want. However, you obviously won’t earn any interest on the savings you withdraw from the account. If you withdraw money, you must keep at least £1 in the account to keep it open.
It should be kept in mind that the 1% interest rate is variable, which means that it is subject to change. If this happens, you will be notified in advance. This will give you enough time to switch accounts if the new rate is no longer competitive.
As well as its normal features, the Yorkshire Building Society account also enters account holders, who deposit between £50 and £150 per month, into a monthly raffle. The raffle has a prize of £1,500, and ten of these prizes are up for grabs each month.
To be eligible for the prize draw, you must reside in England, Scotland or Wales.
What are the odds of winning a prize?
Unfortunately, without details of the number of savers holding the account, it is not possible to determine the odds of winning any of the monthly prizes.
Therefore, savers should assume that they are unlikely to get a prize in the next year. Therefore, it’s probably best to think of this feature as free entry to a mini lottery. In other words, don’t expect to win!
How does the account compare?
It’s fair to say that the new offering from the Yorkshire Building Society compares relatively well to other regular savings accounts available.
At present, Cambridge Building Society offers the highest paying regular savings account at 5% fixed AER for one year. However, you must have been a Cambridge member for at least three years to qualify for this rate. This means that most savers will not be eligible.
In light of this, the highest regular open-to-all savings accounts come from Coventry Building Society and Principality construction company. Both of these providers offer a regular savings account that earns 1.05% AER.
With the Coventry account the rate is variable and you can save up to £500 per month. With the Principality account it is fixed for one year and you can save up to £250 per month.
Although both accounts offer a higher savings rate than the Yorkshire Building Society account, it’s worth bearing in mind that you can only save small amounts in regular savings accounts anyway. As a result, if you’re drawn to the opportunity to grab £1,500, you might be happy to sacrifice 0.05% interest for a chance to win.
How to boost your savings rate? If regular savings accounts aren’t for you, you can now earn a respectable variable AER of 0.72% through a normal easy-access savings account. To compare your options, check out Motley Fool’s list of the best easy-access savings accounts.
Alternatively, savings rates of up to 2.1% AER are available if you’re happy to lock in your money. For more details, see our list of top rated fixed rate bonds.
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