KEEN savers will have noted the recent preponderance of accounts paying mouthwatering rates of up to 10 per cent. This week Barclays and Bradford & Bingley joined the list of banks luring customers with double-digit returns by launching regular savings accounts that pay 10 per cent gross.

The Bradford & Bingley Christmas Saver account has an investment limit of £1,500 and a minimum opening balance of £10. Savers can put away up to £150 a month until December 1, when the account matures. The idea is to encourage those who fund the festive season on credit cards to save for it in advance.

Steve Potter, head of savings at Bradford & Bingley, says: “Choosing the ‘spend now, pay later’ way that many of us do can be costly. For example, if a customer spent £900 on a credit card last Christmas and then pays the minimum monthly payment, which is typically 5 per cent at 16 per cent APR, it will take 64 months to pay off the debt and the total interest paid out would be £288.74.”

The Barclays Regular Saver account will pay 10 per cent for one year after the account is opened and allows monthly payments up to £250. However, it is available only to customers paying at least £1,000 a month into their current accounts.

Both resemble the 10 per cent regular savings account offered by Alliance & Leicester (A&L) to its Premier current account holders. Although the maximum monthly investment allowed with the Bradford & Bingley account is £100 lower than the limit on the Barclays and A&L accounts, the main benefit is that you do not have to hold a Bradford & Bingley current account.

Janet Cane, of Moneyfacts, the price comparison service, says: “Banks are using these eye-catching rates as a way to attract more current account holders but they have imposed a number of restrictions on who can apply. The exception is the Bradford & Bingley account, which is available to anyone.”

Savers attracted by the Barclays deal should be aware that the bank’s generosity on savings is mitigated by the paltry 0.1 per cent it pays on current accounts. Customers who keep a substantial float in their current account might be better off with A&L, which pays 5 per cent on its current account, or Abbey, which pays 6 per cent on both its current account and regular saver.

Regular savings accounts are a good way for inexperienced savers to learn the benefits of putting a little aside each month. Best-buy rates on this type of account have increased by as much as 3 per cent in the past 12 months despite a fall in the base rate.

Sue Hannums, of AWD Chase de Vere, the independent adviser, says: “Any account that encourages people to get into the habit of saving before they spend is worthwhile, especially one that focuses on saving for Christmas, which can be one of the most financially draining times of the year.”

REBECCA O’CONNOR

For more on savings visit www.timesonline.co.uk/savings