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Compare monthly interest savings account

You can get your interest paid monthly on the monthly interest accounts, to give you some extra income each month.

30 results found, sorted by highest interest rate. How we order our comparisons. Commission earned affects the table's sort order.
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Skipton 5 Year Fixed Rate ISA Issue 160
Account type
Cash ISA
Term
5 years
Open with
£500
Interest rate
1.1% AER fixed
Protection scheme
FSCS
Interest is paid on the anniversary of account opening and on maturity. Withdrawals not allowed, early closure incurs interest penalty which may mean you get back less than you paid in. Check restrictions on paying in.
Withdrawal conditions apply.
Rate Tiers
Gross rateGross rateAER rateAER rate
Excluding bonusIncluding bonusExcluding bonusIncluding bonus
£5001.1%1.1%1.1%1.1%
Eligibility
Maximum AgeUnlimited
Minimum Initial Deposit£500
Minimum Age16 years
Permanent UK Resident
Habib Bank Zurich Plc HBZ SIRAT eDeposit Islamic Fixed Term Deposit Account 12 months
Account type
Fixed rate bond
Term
1 year
Open with
£5,000
Interest rate
1.1% EPR (gross p.a.)
Protection scheme
FSCS
This account operates under Shariah principles. It offers an expected profit rate rather than interest. The profit shared is generated from investing in ethical goods and services. T&Cs apply.
Rate Tiers
Gross rateGross rateAER rateAER rate
Excluding bonusIncluding bonusExcluding bonusIncluding bonus
£5,0001.1%1.1%1.1%1.1%
Eligibility
Minimum Initial Deposit£5,000
Minimum Age18 years
Permanent UK Resident

Last updated: 9 February, 2021

What is a monthly interest account?

A monthly interest savings account does exactly what it says on the tin. It's a savings account which pays you your interest monthly.

Each month, the interest is calculated on your balance before being paid to you.

You can take what you earn each month. Some savings accounts pay interest annually, so you have to wait a long time to receive your interest.

Why save in a monthly interest account?

You can benefit from a regular income by choosing to have your interest paid monthly.

You can have your interest payments paid into your monthly interest savings account, or you can have it paid into another bank account. The arrangement you have will depend on which monthly savings interest account you choose. With some accounts, you can choose either option.

People with a lot of savings will benefit most from having a monthly income from interest. They'll get the biggest payments. By having the interest paid into another account, it means they can access money without having to pay a penalty for withdrawing funds.

Sometimes, these accounts also appeal to people who want to use their savings interest to supplement their pension. It can be handy to have a monthly interest payment, without actually needing to delve into your savings.

It's important to note that not all savings accounts pay out in this way, but monthly savings accounts are not the only type of account that does.

Which accounts can offer monthly interest?

You can have your interest paid to you monthly from a wide variety of savings accounts, including:

  • Fixed rate bonds: Tie your money up for a set term with a fixed interest rate. These usually have the best interest rates, but you can't access your money until the fixed term ends, so they don't work for everyone

  • Fixed rate cash ISAs: These are the same as fixed bonds but you save using your tax-free ISA allowance

  • Help to Buy ISAs: These are available to first time buyers only Instant or easy access accounts: These let you take your money out when you want

  • Notice accounts: These require notice before withdrawing your funds

  • Offshore savings accounts: You save your money in an account abroad

  • Cash ISAs: You earn tax-free interest and can access your money easily but interest rates aren't usually high.

Make sure you know what level of access you need to your money you want before choosing an account. Many will tie your money up for a set term, which won't work for everyone.

Which savings account is right for you?

When is a monthly interest savings account better than annual interest savings account?

Monthly interest is the best option when you want to earn an extra monthly income from the interest on your savings.

If you don't need your interest to be paid each month, you could earn more with an annually paid savings account. So make sure you shop around for the best type of savings account for your needs.

How to find the best monthly interest savings account

Banks and building societies change their products and rates all the time. This means the best monthly interest account one day may not be the best one the next day.

It's also important to remember that the best monthly interest savings account for you personally will depend on your situation. Some accounts might have restrictions that don't appeal to you. Some require a large minimum deposit, while others don't allow ongoing deposits. So you'll need to think about how you plan to use the account before choosing one.

Use our table to find and compare monthly interest savings accounts that are currently available.

What's compounded interest?

Compound interest is when you earn interest on your original savings combined with your accrued interest. You don't get to take advantage of this if you have your savings paid into a separate account.

Our table shows the AER interest rate, which tells you exactly how much interest you earn each year as opposed to compounded interest.

Find out how savings interest works here

What are the pros and cons of monthly interest savings accounts?

As with any type of bank account, monthly interest savings accounts come with pros and cons.

The general pros of a monthly interest savings account are:

  • You can benefit from a monthly income

  • You can have the interest paid into a separate bank account, so you can still access some funds even though it's a fixed-rate savings account

  • There are lots of monthly interest savings accounts available. This means you should find competitive rates when it comes to choosing an account.

The downside of a monthly interest savings account is:

  • The rates aren't usually as good as they might be with an annual interest savings account. That means you'd be likely to earn more with the same account if it was an annual one.

  • You don't get the benefits of compounding.

Is my money safe in a monthly interest savings account?

Yes. If you're with a UK-regulated bank, the Financial Services Compensation Scheme (FSCS) will protect your money up to £85,000. The protection would be beneficial if the bank you are with collapsed.

Monthly interest savings account FAQs

No, there are some easy access accounts that let you have your interest paid out monthly, but most accounts do tie your money up for a set term.

Yes, and the same rules apply if you are eligible for a personal savings allowance. Find out more about savings interest and tax here.

Most monthly interest accounts require you to tie your money for a set term, however some let you withdraw when you want.

Yes, you can have your interest paid into another account held with the same provider or some let you have your interest paid into another provider.

Yes, most let you if it is with the same bank or building society, and some let you pay your interest into an account held somewhere else.

About our monthly interest savings accounts comparison

Our comparison tables include providers we have commercial arrangements with. The number of listings in our tables can vary depending on the terms of those arrangements, as well as other market developments. They are all from providers regulated by the Financial Conduct Authority (FCA).

Here is more information about how our website works.

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.