Regular savers are offering high interest rates that grab our attention. A&L offering 12% - but is it really 12%?

What returns can you actually get on your savings? A good calculator to use is the one below:

http://www.vertex42.com/Calculators/savings-interest-calculator.html

Saving £250 per month, your net interest will be £135.58 a year. Not that spectacular now, is it!

You need to go into regular savings with your eyes open, you will get roughly half the interest rate on the full amount you expect to pay or another way of looking at it the full interest rate on half your savings as you will only have the full amount in the account for one month. As long as this is taken into account and the full terms and conditions read (most high interest ones lock your money in for a year or at least limit withdrawals) they can be good. They are also very useful if you also have a lump sum to invest (drip feed into the regular saver), this way you get roughly the interest rate halfway between your savings account and the regular saver, making more than you would in your normal savings account.

Halifax has a really easy regular savings calculator:-

http://www.halifax.co.uk/savings/calculator/home.asp?ver=hfx

Also a useful savings calculator on money saving expert, both for calcuating regular savings and drip feeding a lump sum into a regular saver. Tax paid on savings can also be included.

http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

I have heard of some good deals being available with online savings accounts, not managed in the branches so the banks can offer a better rate to the customer. Do e-savings accounts (ie. online only) offer the same sort of service as in branch equivalents?

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We live in a consumer generation, but we also have to work in it.