Building society offers bumper 6% interest rate on savings account

Darlington Building Society is offering savers a competitive 6% AER interest rate on its regular savings account.

Savers can deposit up to £250 into the account each month within its 12-month term, meaning a maximum of £3,000 can be put away in total. Regular savings accounts typically pay higher interest rates than other accounts, and require people to deposit a set amount each month and make minimal to no withdrawals. They work well for consistent savers or those looking to start a regular savings habit.

Darlington Building Society's account allows up to two withdrawals per calendar year. Savers aged 16 and over can open the account online with a minimum deposit of £1.

Based on the current interest rate, a £3,000 deposit is estimated to earn £97.89 over 12 months, bringing the total balance to £3,097.89.

Interest is calculated daily and paid annually on December 31 and on account maturity. Interest can either be added to the account or paid to your bank or building society account.

How does the account compare?

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

Principality Building Society tops the table for regular savers with an Annual Equivalent Rate (AER) of 7.5%. The account runs for six months, with interest paid on maturity. Savers can deposit up to £200 a month - a maximum of £1,200 - but no withdrawals are allowed before the term ends.

At the current rate, a full £1,200 deposit would earn about £27.53 over 12 months, for a total of £1,227.53. The high AER is eye-catching, but the short-term limit overall returns.

Zopa follows with a 7.1% AER over 12 months, allowing deposits of up to £300 per month and total savings of £3,600. Interest is paid at the end of the year, adding roughly £137 for a final balance of around £3,737. Withdrawals can be made at any time without penalty.

First Direct is close behind at 7% AER, also over 12 months, with the same £300 monthly deposit limit. Savers could build £3,600 over the year and earn about £136.50 in interest, for a total of £3,736.50 at maturity.

Other providers offering competitive interest rates on regular accounts include Nationwide Building Society with a 6.5% AER, and Lloyds Bank with a 6.25% AER on its Club Lloyds account.

Savings products on the market has reached a record high, new data from Moneyfacts shows. The increase has been largely attributed to the influx of challenger banks entering the market.

However, average savings rates have dropped, making it imperative for Brits to review their accounts and switch if they're not receiving a competitive rate.

Rachel Springall, finance expert at Moneyfacts, said: "Savings product choice has reached a record high, and this has been largely fuelled over time by the increase of new challenger banks entering the market. New brands bring positive energy into the arena, as they typically fight harder for savers' deposits to fund their future lending.

"However, with the Moneyfacts Average Savings Rate falling slightly to 3.50%, there is no denying that lower interest rates will dampen the sentiment of savers, but they must ensure to compare deals and switch regularly, and not to let apathy win."