Building up your savings is a critical part of planning for your future.

Whether you are saving for a specific goal, such as a once-in-a-lifetime trip, or simply want to put some money aside for retirement, getting into the habit of saving regularly is a fantastic way to learn how to manage your finances.

Regular Savings Accounts are a popular way to save money every month, but sometimes you may ask yourself: are Regular Savings Accounts worth it?

There are plenty of different ways to save regularly, and in this article, we will explore a range of savings options, including Regular Premium Investment ISAs, Tax Exempt Savings Plans, and Regular Savings Plans.

Getting To Grips With Regular Savings 

What is a Regular Savings Account?

A Regular Savings Account is a type of account offered by some financial institutions in the UK.

The primary difference between a Regular Savings Account and other accounts, such as an instant-access saver or a fixed-term account, is that a Regular Savings Account requires regular contributions to be made to the account over a set period.

In addition to the required monthly contributions, other restrictions may apply, including penalties for withdrawing funds and a maximum monthly contribution cap.

However, in return for making regular contributions and accepting the restrictions on deposits and withdrawals, savers will typically receive a higher interest rate than they would receive on a current account or other types of savings accounts.

It is also important to distinguish between cash-based Regular Savings Accounts and other types of Regular Savings Accounts, like a Regular Premium Investment ISA.

A cash based Regular Savings Account requires customers to commit to a regular investment amount and a set period of investment. During this time, the savings made by the customer are held as cash that the customer cannot access without incurring penalties.

Because the customer’s money is saved as cash and these accounts offer a greater return than current accounts, a cash based Regular Savings Account will generally only provide a higher interest rate for 12 months.

Sheffield Mutual does not offer a cash based Regular Savings Account. However, there are other types of Regular Savings Accounts available, as well as Regular Savings Plans, which we will be discussing in this article.

What Is A Regular Premium Investment ISA?

A Regular Premium Investment ISA is a type of Stocks and Shares ISA offered by Sheffield Mutual and designed for regular savings. It allows our members to invest between £30 per month and £1,666 per month.

Like a Regular Savings Account, a Regular Premium Investment ISA requires regular contributions to be made to be most effective.

However, Regular Premium Investment ISAs provide several benefits above a Regular Savings Account. For example, earnings made in a Regular Premium Investment ISA are generally tax-free and will continue to provide benefits for longer than the typical 12-month period offered by Regular Savings Accounts.

In addition, payments to your Regular Premium Investment ISA can be increased, decreased, stopped, or started to reflect any change in your circumstances.

However, there are still risks associated with a Regular Premium Investment ISA. If you withdraw funds during adverse market conditions, there is a risk that you could receive less money out than you have invested. This type of ISA offering also allows our members to earn tax-free bonuses, but these bonuses are not guaranteed. For more information about the Regular Premium Investment ISA, consider browsing our Key Information Document and Product Information Document.

Please note that tax treatment depends on individual circumstances and may be subject to change in the future.

What Is A Tax Exempt Savings Plan?

A Tax Exempt Savings Plan is a type of savings plan unique to friendly societies, such as Sheffield Mutual. It offers members the opportunity to save either monthly or annually, in addition to their annual ISA allowance.

Because a Tax Exempt Savings Plan can last between 10 and 25 years, it can be a highly effective strategy for saving over a longer period of time.

Since our members are able to customise their plan, they are able to choose a plan length that works in tandem with their overall investment strategy, as well as offering the chance to earn additional bonuses.

In addition, like an ISA, a Tax Exempt Savings Plan offers tax-free savings 

When opening your Tax Exempt Savings Plan, you will receive a ‘Sum Assured’, which represents the guaranteed minimum amount of money you will receive when your plan matures, allowing you to plan your investment strategy with confidence.

There are also risks associated with Tax Exempt Savings Plans: If you close the plan before the maturity date (which you select at the beginning of the plan), you may receive less back than you initially invested. Bonuses can be earned under this plan, but they are not guaranteed and may fluctuate.

If you are considering opening a Tax Exempt Savings Plan, consider reading through our Product Information Document and Key Information Document. 

Please note that tax treatment depends on individual circumstances and may be subject to change in the future.

What Is A Regular Savings Plan?

A Regular Savings Plan is a plan designed for members who may have already maximised their ISA and Tax Exempt Savings Plan contributions. Although Regular Savings Plans don’t offer the same tax-exempt benefits of either the Regular Premium Investment ISA or the Tax Exempt Savings Plan, a Regular Savings Plan can be a great way to save every month.

A Regular Savings Plan allows you to commit to saving for anywhere between 10 and 25 years, with the potential to earn bonuses along the way. At the beginning of your plan, you will receive a ‘Sum Assured’, which represents the guaranteed minimum amount of money you will receive at the end of your plan, giving you the peace of mind to understand your savings goals.

The Regular Savings Plan still carries risks. If you close the plan before maturity, you may receive less money out than you have invested, and the bonuses you can earn are not guaranteed and can fluctuate.

If you are interested in learning more about our Regular Savings Plan, consider reading our Product Information Document and Key Information Document.

Please note that tax treatment depends on individual circumstances and may be subject to change in the future.

Explore Your Savings Options With Sheffield Mutual

Saving regularly is a crucial part of managing your financial well-being.

Although Sheffield Mutual don’t offer a cash based Regular Savings Account, we provide a range of alternative regular savings products designed to help our members meet their long-term goals.

If you have any questions about the products listed here or ​​are interested in becoming a member of Sheffield Mutual, please don't hesitate to contact our team today.

This blog provides generic information and the writer's opinions and should not be relied upon for investment decisions. Sheffield Mutual has provided no advice. If you doubt whether a savings or investment plan suits you, consider contacting a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk or www.vouchedfor.co.uk. Advisers may charge for providing such advice and should confirm any costs beforehand.