Is it worth paying a £5 fee each month to get the rate?
With interest rates on savings falling across most accounts, it’s time to look again at the 5.12% paying Barclays Rainy Day Saver. Will you make more on your money, despite paying a monthly fee and a cut coming to the interest rate next year? Here’s what you need to know.
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What is the Barclays Rainy Day Saver
The Rainy Day Saver account from Barclays is only available to specific current account holders. It’s easy access so you can take your money out whenever you want, and add more money as and when.
To get it, you’ll need to either pay extra for the Blue Rewards add on, or have the Premier current account. The latter requires a high £75.000 annual salary, so for most people access is going to come via the Blue Rewards package which you can sign up for with Barclay’s standard current account.
The problem is this comes with a £5 fee each month. Until late 2024 you could wipe that out with a reward, but that’s sadly gone. So to get the Rainy Day Saver you’re looking at a £60 outlay each year – which will obviously eat into your annual interest.
There are other benefits with Blue Rewards, such as free Apple TV+, though if you weren’t already willing to shell out £5 each month for the streaming service, it’s hard to justify the fee just for that.
So we’ll assume here that the £5 charge will come out of your savings interest.
How much does the Rainy Day Saver pay?
The headline rate is a decent 5.12% AER. Though for much of 2024 that was beatable by free and less complicated easy access accounts, those have largely diasappeared, making 5.12% one of the highest paying accounts right now.
However, on 13 February 2025, this will fall to 4.87% AER. That’s still decent compared to existing alternatives, and should prove competitive and near the top of the tables if there’s not another reduction.
But there’s another catch. You’ll only get this rate on balances of up to £5,000. Above this the rate drops considerably to 1.16% AER – which is frankly not even worth thinking about.
It also means that if you save the full £5,000 in the account you’ll actually get the gross rate of 5% interest (until 13 February 2025, then it’ll be 4.76% gross) as that interest can’t compound at the higher rate. Yes technically it’ll be a little higher as it’ll earn the lower 1.16%, but you’re far better off moving the interest elsewhere when it’s paid – I’ll come back to this.
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How much interest will you earn?
In this first table I’ve shown what you’ll get in interest over a year based on the new 4.87% rate, with a second looking at the existing 5.12% AER rate. For both tables, desposits of the full £5,000 have been calculated with the lower gross rate.
If you have the Premier current account, or have Blue Rewards but think you can justify the £5 fee every month on the other limited benefits, then the second column shows the real return you get.
However, if the fee does need to be factored in, I’ve shown what you’ll really earn after a year, and the effective interest rate.
With 4.87% AER rate (assuming full 12 months from 13 February 2025)
Amount saved | Annual Interest | Interest after £60 fee | Effective interest rate |
£500.00 | £24.35 | -£35.65 | -7.13% |
£1,000.00 | £48.70 | -£11.30 | -1.13% |
£1,500.00 | £73.05 | £13.05 | 0.87% |
£2,000.00 | £97.40 | £37.40 | 1.87% |
£2,500.00 | £121.75 | £61.75 | 2.47% |
£3,000.00 | £146.10 | £86.10 | 2.87% |
£3,500.00 | £170.45 | £110.45 | 3.16% |
£4,000.00 | £194.80 | £134.80 | 3.37% |
£4,500.00 | £219.15 | £159.15 | 3.54% |
£5,000.00 | £238.00* | £178.00 | 3.56% |
With 5.12% AER rate (assuming full 12 months despite cut on 13 February 2025)
Amount saved | Annual Interest | Interest after £60 fee | Effective interest rate |
£500.00 | £25.60 | -£34.40 | -6.88% |
£1,000.00 | £51.20 | -£8.80 | -0.88% |
£1,500.00 | £76.80 | £16.80 | 1.12% |
£2,000.00 | £102.40 | £42.40 | 2.12% |
£2,500.00 | £128.00 | £68.00 | 2.72% |
£3,000.00 | £153.60 | £93.60 | 3.12% |
£3,500.00 | £179.20 | £119.20 | 3.41% |
£4,000.00 | £204.80 | £144.80 | 3.62% |
£4,500.00 | £230.40 | £170.40 | 3.79% |
£5,000.00 | £250.00* | £190.00 | 3.80% |
As you can see, even with the full £5,000, you’re only earning 3.56% after the fee once the new rate is in place. That’s well down on the best paying easy access savings rates right now – and probably will be for a good while yet.
But it gets worse if you have less in there. In fact, if you have under £1,249 for a whole year, you’ll be losing money!
Full £5k? What to do with your interest payments
A quick aside here. If you are keeping the account, and have the full £5,000 saved, don’t forget that when interest is paid in each month you won’t be getting the full 5.12%/4.86% on that interest. Instead it’s the pitiful 1.16%.
So you’ll need to take action each month to ensure that cash is getting a better rate. Very simply, you’ll withdraw the interest payment and then transfer it to a better paying account. It’s not much admin, and pretty quick to do – though I’d suggest you set up a reminder at the start of the month to do it.
Is the Rainy Day Saver worth it?
It’s clear cut if you are only paying the £5 a month for Blue Rewards to access the 5.12% paying account. A resounding no. I think existing customers are better off closing Blue Rewards and moving their savings to an account elsewhere that pays more than the effective 3.56% you’re getting (at best) with the rate from February. And that’s true even now before the rate cut comes along.
However, the opposite is pretty obvious for Premier account holders. At the time of writing there’s only one other easy access account which will beat 5% gross, and that’s got similar issues. With the Santander Edge Saver you’ll get 6% on up to £4,000 and pay a £3 fee for the required current account (though there is a hack to avoid this). So if you don’t fancy that, this the Rainy Day Saver is a decent alternative, or addition.
You’ll want to look again in mid-February to see what alternatives are around then, as it could be there are more options above 4.86%, though I don’t think there will be too many.
And for those who already subscribe to Apple TV+, and see Blue Rewards as a way to save there, then this savings account as an added bonus. Though I’d suggest they look to see if there are other ways to save on Apple TV+ instead. Once you do that, you’ll be back in the boat where the £5 comes off any earned interest.
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