Yorkshire Building Society is the latest big firm to launch a new savings account offering the chance to win monthly prizes.
It’s a regular saver account with a limit of £150 per month, meaning £1,800 can be saved over 12 months.
The Make Me a Saver account pays 1 per cent interest and instant access to savings without penalty.
It will also offer 10 £1,500 prizes each month, in a similar move to other banks and mutuals looking to attract savers in the same way as hugely popular Premium Bonds do.
Prize piggy: The new savings account can be opened in branches, agencies and online
To be entered into one of the prize draws, customers need to deposit money into the account and increase the balance by at least £50 each month.
The account also allows for unlimited instant withdrawals without loss of interest.
A total of eleven prize draws will take place once each month between March 2022 and January 2023 with the account maturing on 31 January 2023.
James Blower, head of digital at Moneyfacts.co.uk, said: ‘I think the new monthly saver from Yorkshire is a very positive addition to the market.
‘It’s nice to see a monthly prize draw that pays both a competitive rate of interest and the potential of a cash prize too, rather than either/or.
‘It’s great that the account can also be accessed without notice too, whereas many regular savers tie in savers to a fixed period before they can access their cash.
‘While there are higher paying regular savings accounts on the market, for those savers who want access to their cash and the chance to win a significant prize it’s definitely worth considering.’
Yorkshire Building Society claims it hopes its new product will help encourage some people to get into the habit of saving
Chris Irwin, director of savings at Yorkshire Building Society believes the new account will encourage wannabe savers to create a new savings habit in 2022.
More than half of adults are determined to improve their financial health in 2022, according to research by global investment firm abrdn, with the majority aiming to save more.
Irwin said: ‘Now more than ever, with current and potential future economic uncertainty, it’s important for people to try and build their financial resilience where they can and for us as a Society to help people to save.
‘We want to continue to help people establish a healthy savings pot and improve their financial wellbeing and are trying to promote a save-first culture to help people put aside money that will help build a nest egg.’
How does it compare to regular savings deals?
The 1 per cent rate on offer means this regular savings deal is far from being the most lucrative on offer for savers.
A saver stashing away the maximum £150 each month into this account could expect to earn £8.27 of interest after one year.
The market leading deal offered by Cambridge Building Society pays 5 per cent interest on its extra reward regular saver account, and limits monthly deposits to £250 with a maximum balance of £3,000.
Customers will also need to have another product with the building society to be eligible, a significant hurdle to jump over.
Furthermore, unlike the instant free access offered by Yorkshire Building Society, withdrawals with this deal aren’t allowed for one year after opening the account.
That said, for an eligible saver stashing away the maximum £250 each month, after one year they would have accrued £81.58 in interest.
NatWest regular savers are limited to depositing just £50 each month
NatWest allows regular savers to earn 3 per cent interest on balances up to £1,000 although savers will be limited to depositing a maximum of £50 a month.
Like with Yorkshire Building Society’s offer, savers can withdraw their money at anytime.
A saver putting away £50 each month via the NatWest saver could expect to have accrued £8.32 in interest by the end of the year.
For those looking to put away more, TSB and Nationwide are offering rates of 2 per cent for regular savings deals.
Every month, TSB picks five lucky winners to receive £1,000 and 50 winners to receive £100
TSB’s regular saver allows customers to earn interest on balances up to £1,500 by saving between £25 and £125 each month.
The account also allows for immediate access to your money with no withdrawals charges.
A saver stashing away the maximum amount each month could earn £14.16 in interest over the course of a year.
Nationwide’s offer is a little more generous paying 2 per cent interest on maximum monthly deposits of £200.
However, those who make four or more withdrawals will see their rate drop to 0.35 per cent for the rest of the term.
How does it compare to other monthly prize draws?
Bank and building societies offering monthly prizes is nothing new and don’t be surprised if you see more appear throughout 2022.
Blower said: ‘There are other savings accounts with prize draws, like Family Building Society’s Windfall Bond, and TSB’s My Dream, but both pay a much lower interest rate.
‘I think we will see more banks follow suit and the popularity of those that have joined the market, coupled with Premium Bonds going from strength to strength with record amounts held in them, demonstrates that there is a demand from savers for these types of accounts.’
Yorkshire Building Society states there will always be ten prizes to be won each month, and this won’t be impacted by how many eligible accounts are entered into the draw.
As a new savings product, this will mean the sooner you enroll the more likely you are to win one of the cash prizes.
For example, if a customer qualifies for the draw and their account is one of 3,000 eligible accounts in one monthly draw, the chances of winning are one in 300, but if this rises to 10,000 eligible accounts, the chances of winning become one in 1,000.
It means in theory your odds of winning may better than with some of the other providers – albeit this could quickly change given Yorkshire Building Society has almost three million customers it can advertise the deal to.
It’s also worth noting that savers will be entered for every prize draw they qualify for, even if they have won in a previous month. Here’s how rivals compare:
NS&I pays out around three million tax- free prizes ranging from £25 to £1m every month to Bond holders
NS&I’s Premium Bonds
When it comes to monthly prize draws, NS&I’s Premium Bonds will likely be the first product that comes to most people’s minds.
The Premium Bond draw has been running since 1956 and there are now 21.1million Premium Bond holders holding more than 113 billion eligible £1 bonds between them.
NS&I pays out around three million tax-free prizes ranging from £25 to £1million every month to Bond holders.
The odds of winning a monthly prize with £1 bond is currently fixed at 34,500.
The odds of winning the £1 million prize with a single £1 bond are just one in 56.54 billion whilst the odds of winning a £100,000 prize is one in 22.62 billion.
Of course, this improves depending on how much you put in.
Having £50,000 worth of Premium Bonds will improve your odds of winning the £1million jackpot to one in 1,130,800.
The Windfall Bond has a maximum capacity of 15,000 open accounts, each holding £10,000.
Family Building Society’s Windfall Bonds
A lesser known alternative to Premium Bonds is the Family Building Society’s Windfall Bonds.
Family Building Society’s Windfall Bonds, which began in 2015, have £140million stashed away in them and only a few thousand customers
Premium Bonds require a minimum investment of £25 to enter the draw, whilst Windfall Bonds require a far heftier £10,000 deposit.
However, there is no maximum cap on Windfall Bonds, subject to availability, whereas with Premium Bonds you can deposit a maximum of £50,000.
There are currently 14,000 Windfall Bond accounts, each holding £10,000 – but many bond holders have more than one account.
The number of windfall Bonds currently being entered into the monthly prize draw is 15,000, and the remaining 1,000 spaces are filled by blank tickets.
This could reduce if more accounts joined the draw, but Family Building Society says it does not impact on the probability of winning.
Each qualifying £10,000 bond is entered into a free draw for a chance to win one of 21 monthly prizes. There are fifteen worth £1,000, three worth £2,500, two worth £10,000 and one £50,000 prize.
Each qualifying entry can win only one prize each month, and according to the building society each individual Windfall Bond entered into the draw has a one in 714 chance of winning a prize in any given draw.
There have been over 105,000 winners of Halifax’s prize draw and the bank has paid out over £57 million in prizes so far to its customers.
Halifax Savers Prize Draw
Halifax current account customers can register through online banking or by visiting a local branch for its savings draw.
Each month over 1,600 savings customers in the Halifax draw are randomly selected to win money – three of the prizes being worth £100,000.
However, there is one barrier to overcome as they’ll need to hold £5,000 or more in savings for a whole month to be entered into the following month’s prize draw.
The £5,000 can be made up of multiple pots across any Halifax savings account including cash Isas, although children’s accounts are excluded.
Lloyds Banking Group, which Halifax is a part of, declined to state how many customers are currently eligible due to the figures changing from month to month.
Nationwide’s Member Prize Draw
Nationwide members benefit from a monthly prize draw split into 8,008 prizes, with one worth £100,000, two worth £25,000, five worth £10,000 and the rest all worth £100.
Unlike, with Halifax, Nationwide members are automatically opted in, so as long as you hold a mortgage, savings account or current account with Nationwide, there is nothing to do.
Nationwide currently has around 14.2million members eligible for the first Member Prize Draw, which would mean the odds of winning any prize are around 1 in 1,750, although these odds will change month-on-month depending on the final number of members eligible for entry.
The odds of winning one of the eight big-value prizes of either £10,000, £25,000 or £100,000 is just one in 1,775,000 each month.
TSB’s My Dream
TSB is currently awarding five prizes of £1,000 and fifty prizes of £100 to randomly selected customers who enter the draw.
It is conducting six draws, the first of which was awarded in December, with the money paid directly into customers’ savings pots.
To enrol, its current account customers need to put money into a ‘savings pot’ within their Spend & Save, or Spend & Save Plus current account.
At present, TSB claims to have around 180,000 savings pots being used – although that number is likely to rise as more customers become aware of the draw, meaning the sooner you opt in, the better your odds.
Based on the current number of people opted in, there is roughly a one in 3,275 chance of winning either a £1,000 or £100 monthly prize, or one in 545 over the course of the six month period.
THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS
Lloyds Bank’s Club Lloyds account will pay £125 when you switch. There is a £3 monthly fee but this is waived if you pay in at least £1,500 each month. You also earn monthly credit interest on balances up to £5,000 and can choose a reward each year, including 6 cinema tickets.
Virgin Money’s M Plus Account offers £20,000 Virgin Points to spend via Virgin Red when you switch and pays 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 must be paid into a linked easy-access account paying 1% interest and 2 direct debits transferred over.
HSBC’s Advance Account pays £170 when you switch to the account. You need to set up two direct debits or standing orders and pay in at least £1,500 into the account within the first 60 days.
First Direct will give newcomers £150 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in at least £1,000 within three months of opening the account.
Nationwide’s FlexDirect account comes with up to £125 cash incentive for new and existing customers. Plus 2% interest on up to £1,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both the latter perks last for a year.
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