My Experience with First Direct's Regular Saving Account: A Simple and Rewarding Way to Save
When it comes to saving money, I’ve always appreciated options that are straightforward, secure, and offer a little extra reward at the end. One such option I tried recently was First Direct's Regular Saving Account. I had heard good things about it, and after using it for a year, I can now reflect on how it performed for me.
The Saving Journey
First Direct’s Regular Saving Account is quite simple: you can save between £25 and £300 each month over a 12-month period. Once the account matures, you receive your savings along with the interest that’s been accrued over the year. I decided to set up a standing order of £220 per month, a comfortable amount that fit into my budget without feeling restrictive.
After 12 months, I had contributed a total of £2,640 (£220 x 12). First Direct offers a competitive interest rate for this type of savings account—7% AER at the time. When my account matured, I received approximately £100 in interest, which was a nice bonus for simply setting aside money regularly. While £100 might not seem like a life-changing amount, it felt rewarding to see my efforts pay off with no risk involved.
I was already a member with First Direct as I swapped over to them taking advantage of their £175 switch offer - check out on Money Saving Expert to see if there are any current offers. It's a great way to make some free cash!
Why I Chose a Regular Saver Account
One of the main reasons I was drawn to First Direct’s Regular Saving Account was its simplicity. Unlike some investment options, there’s no market volatility to worry about, and you know exactly what you’re going to get. The fact that the account is FSCS insured gave me peace of mind that my money was completely safe.
Another attractive feature is that the account encourages consistent saving. Setting up a standing order meant I didn’t have to think about saving each month—it happened automatically, which kept me on track. For anyone who struggles with disciplined saving, this could be an ideal way to build up a financial cushion.
I used this account as a Sink Fund ultimately which will then be used for holidays in the future.
Comparing Other Saving and Investment Options
After reflecting on my experience with First Direct, I started to wonder how other saving or investing methods might compare. Here are a couple of alternatives I looked into:
NS&I Premium Bonds offer a different kind of saving experience. Rather than earning a guaranteed interest rate, bondholders are entered into a monthly prize draw with the chance to win tax-free prizes ranging from £25 to £1 million. The odds of winning are typically 24,000 to 1 for each £1 bond, so while there’s the excitement of a potential big payout, there’s also a chance you may end up with no return on your money. Unlike the First Direct account, you could theoretically win nothing, although your capital is still safe. It’s a more speculative, but fun way to save, particularly if you like the thrill of a lottery-style investment.
I currently keep my Emergency Fund in Premium Bonds and do love it when I get a small win every now and again - 9 in total so far!
If you're looking for potentially higher returns, investing in the stock market—such as in an S&P 500 index fund—could be an alternative. Historically, the S&P 500 has returned around 7% to 10% annually, though this is far from guaranteed. Your £2,640 invested in an S&P 500 fund over the same 12 months could have earned you more than £100 in gains (assuming an average return). However, it’s important to remember that with greater returns comes greater risk. The stock market fluctuates, and in a downturn, you could end up with less than you initially invested.
I already contribute what I can into index funds, but I didn't want the risk at the end of 12 months the market had gone down, and I didn't have my holiday money!
Conclusion
Looking back, I’m pleased with the First Direct Regular Saving Account as it provided a guaranteed, steady way to save and grow my money without risk. If you prefer security and predictability, it’s an excellent option. For those seeking more adventurous, potentially higher returns, Premium Bonds or stock market investments like the S&P 500 may offer an exciting alternative—though they come with the possibility of greater risk.
Ultimately, the best savings strategy depends on your personal goals and risk tolerance, this is not financial advice just a reflection on my experience. I have opened up another regular savings account and will be doing the same with them for the next 12 months.
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