The Co-operative Bank offers competitive 7% interest savings account

The is offering regular savers a competitive 7% interest rate.

While interest rates have been dropping in recent weeks following the decision to reduce the base rate to 4.25% this month, regular savers are some of the only accounts offering returns much higher than this. Regular savings accounts typically require people to deposit a set amount each month and make minimal to no withdrawals. They work well for disciplined savers who want to build their over time, benefitting from higher than standard accounts.

Savers can launch The Co-operative Bank's Regular Saver (Issue 1) with just £1, and interest is paid after 12 months when the account matures.

Britons can save up to £250 per month, meaning a maximum of £3,000 can be invested throughout the term. Based on the current interest rate, a £3,000 deposit is estimated to earn £114.21 over 12 months, bringing the total balance to £3,114.21.

To apply, savers must be UK residents aged 16 and over and already have a Co-op Bank current account.

If you're making a joint application, just one saver needs a current account to qualify.

This account is more flexible than what's typically expected from a 'regular' savings account, as withdrawals are allowed at any time without penalty.

What else is out there?

tops the table for regular savers with an Annual Equivalent Rate (AER) of 7.5%. The account runs for six months, and interest is paid on maturity.

People can save up to £200 per month, which means the pot can grow to a total of £1,200, and withdrawals are not permitted until the account matures.

With a maximum monthly investment of £200, savers will end up with £1,227.53, including £27.53 in interest. So, while it may have a market-leading AER, its six-month term limits the total interest earned.

First Direct places just behind with a 7% AER over 12 months. The account allows a higher monthly deposit of £300, which totals up to £3,600 in savings over the course of a year.

At the end of the term, savers will have £3,736.50, including £136.50 in interest. Although First Direct's is lower, the longer term and higher deposit limit make it a potentially better option for amassing larger savings.

Other providers offering competitive interest rates on regular accounts include , , and .