Regular Savings Accounts

[MSE Martin]

This discussion relates to the following article Regularly Beat the Best Savings Accounts (http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1092602115,12117,)

To discuss it or ask a question click reply.

(note this article has been updated since the discussion was started, so some of the earlier posts here may be out of date)

This is the place to put your comments or ask your questions
Hi Martin, How to invest a lump sum? I am a bit confused, this is the way i read it. you put £250 in #1 account, after a month you transfer the £250 into #2 account but at the same time there is an other £250 going into #1 account so at all times there will be £250 in #1 account so by the third month there will be £250 in #1 account and £500 in #2 account, there by making interest on both accounts of £1000 interest. Have i got it right or not? ??? Anything to do with banking does my head in. ;D

[MSE Martin]

Noooooo :)

OK.

Account 1: ING Direct 4.3%
Account 2: Leeds & Holbeck regular saver

You have £2000 to invest

You put £250 in Account 2 and the remainder in account 1

Every month you transfer £250 (max allowable) from account 1 into account 2. The only thing to be careful of is that you must ensure is that once you've nearly spent up the initial lump sum - you keep enough back to make the minimum monthly payments.

Does this make sense

martin

[webmasterpolo]

I have considered the ING and the Leeds and Holbeck accounts - l think the L+H account is the one l would go for as the withdraw limit does not bother me.

My gf and l are going to start saving for a car next month - £300 per month between us. !I want to find the best place to put the money. !I currently have an ISA with about £3250 in it. !I think it's currently only paying 3.64% tax free. !

Questions l have are:

1) !Would l benefit from transferring the ISA money into the ING account and save monthly into the ING account while transferring into the L+H account as suggested to Ernst?

2) !Should l just save into the ISA and build on what l have there instead of opening a L+H account at all?

3) !Would it be best if l kept the ISA (but moved it to a higher interest one) and opened a L+H account for the monthly savings?

Please let me know you wonderful group of money saving gurus.

[MSE Martin]

I am assuming you are both tax payers - in which case a cash ISA for safe savings is the first place to put your money - as 4.2% (best paying instant access ISA) is a lot better than a taxed 5%.

So push as much as you c an in this years cash ISA (is your £3k in this years or last years) and the rest into Leeds & Hoblbeck.

As a note - read my cash ISA article and it explains how you can transfer your existing cash ISA to a new provider that pays more

Martin

[webmasterpolo]

Excellent - thanks for replying so quickly Martin.

I have not used this years £3000 allowance yet - so l will take full advantage of that.

I think l read that ISA article a while ago - l'll go and refesh my memory and make the tranfer asap.

I WILL be buying your book! ! ;D

(and recommending it to everyone) !;)

[1jacks64]

I have an Abbey National e-saver account which I have had now for 7 months. I think I am right in saying that I now longer receive the special bonus that people get if they have had the account for less than 6 months.

Is there anywhere else that pays a higher gross interest rate than one I am getting now? I am particulalrly interest in ISA's but also savings accounts.

[laminki]

check out the best buys section of this website (or any Sunday newspaper)

[alared]

A good website for daily savings rates and best buys is www.moneyfacts.co.uk
Best hold fire until early August though when most providers are expected to lower their interest rates.

How to invest a lump sum?

One final tip, to invest a lump sum using these schemes, put the money first in a standard savings account. Then set up monthly payments from it to the Regular Savings Account,

How do you set up monthly payments from a savings account (such as ING) to the Regular Savings Account. Saving acounts don't normally provide for bankers orders.

[laminki]

ING do allow this. Refer to the original article. its not flawed or incorrect and is well researched. Martin's not been wrong so far

[jo_knight]

If you want to save more in Regular Savings then Supersaver with Norwich & Peterborough www.npbs.co.uk will take £1000 a month and after 9 months when you have £10,000 in the account the tiered interest will rise to 4.80% from fc4mkvtqj

[Dunspendin]

In the Regular Saver article it is stated that the Leeds and Holbeck account has a maximum monthly deposit of £250. This isn't strictly true - if you opened the account a little while ago (approx 1 year - sorry I can't be more precise), you can up the deposits to a max of £500. The T's & C's were changed to reduce the max a year or so ago. If your a/c predates the change you can get the higher deposit - you may need to haggle a little but it is worth the effort!

Hello,
The problem, (the way I see it) with regular savings accounts is that if after saving for a year one wants to transfer to a different regular savings account, one cannot move the lump sum. Is that correct?
If it is, this means that you are either stuck with a potentially lower rate, or have to start building your whole amount from scratch - a situation which can be made worse if one say, has 5 years worth of savings in a regular savings account. -- ??

Ive just read the article on Derbyshire BS's 5% account. If I open an account today and deposit at least £10 per month will I receive the bonus rate on 31/07/04 or not until 31/07/05?

[murphydavid]

Hi
I just did some sums
Derbyshire Building Society -
If you put £5500 in their savings account which is at 3.45% and £500 in the regular savers at 5% this being the start point for a lump sum of say £12000 then make a standing payment transfer of maximum £500 a month. Then after a year (not including tax) you would have £6262.13 (However if you put the whole £6000 in Ingdirect at 4.3% after a year you would have £6263.12. So you are down £1). After 14 months you break even at £12350 having put in another £6000 to each (to keep it going) after 24 months the Derbyshire would be £43 ahead at £12843.34 against £12800.90 in ingdirect
So if you have a lump sum and take the Derbyshire !option you need to keep it there for at least 14 months and
The Derbyshire needs to remain consistant for that period.
As I did the math I though I would share it with you.

DM

Re the Derbyshire's Regular Savings Account, what you will NOT find in any of their small print is the maximum amount of money you can open this account with - the figure is £1,000. Having tried to open an account with them on 13 Jan 2004 in Birmingham I found it advantageous to have done some homework in advance. The counter staff know surprisingly little, and assume potential customers are telepathic and can guess at such things as the maximum amount of money that can be used to open an account.

[murphydavid]

Derbyshire's REGULAR Savings Account is the one you add regular deposites to each month. According to their web site it allows a maximum regular monthly deposite of £500.00 and a minimum of £10 so you should be able to open it with £10. But you need to have £10.00 a month to add to it from then on.

Ref
http://www.thederbyshire.co.uk/savi/easyacc/easyacc_keyfeat_regsav.html

DM

[MSE Martin]

I've just noticed this - the Derb BS account has a minimum opening balance of £10/month

martin

[aagoren]

Martin,
In your artile you wrote that the rate for Leeds & Holbeck BS regular saving is 5.0%, i've heked in their site and it is only 4.6%. did I miss something?
another question is regarding the bonus from Derb BS. as they pay the interest on July, if I open the aount now, will i get 5.0%? or only next year?

I also spoke with Derb BS customer service and told the maximum opening balance is £500.

[MSE Martin]

:) yes you are missing something.

The date of the article. That's why I add the update note. As i've noticed a few people missing these - i am starting to add a note to check the date on all recent articles.

Martin

[ioscorpio]

The Derbyshire Regular Saving Account only allows you to make 1 withdrawal per year or miss 1 payment, otherwise you lose the bonus.

[MSE Martin]

This is true IOMEXICO - but that's the point about Regular Savers. In fact that is rather generous conditions, many dont allow any missed payments. Regular savers are only for those who can put money aside each month - though if you use my 'lump sum' tactic at the end of the article you can work round this.

Martin ;D

[colpian]

Quote from Customer Services at Derbyshire BS
"I can confirm that if you open the account [Regular Savings Account] and adhere to the rules you will receive 5% on the amount of investment you have in your account.
Our investment accounts are based on daily interest so however long you have the funds in the account for you wuill earn the bonus rate."

[john.cliss]

Hi,

Where is this Halifax 6% Savings account described in the latest Money Tips email? The Link is outdated, the Moneysupermarket Website does not list it, and also the Halifax website does not show it.

HELP!! ???

[MSE Martin]

Just put regular savings account in speech marks on the search box on the main site. Also note the account starts on 1 March

[Iangrayson]

The 6% account that is available from 1st March. Will we be able to sign up to that over the counter, or is it via internet. Does anybody know? There doesn't seem to be any info on it on the Halifax website at present.

[Iangrayson]

Have just phoned Halifax on the number you advised. They have booked me a call-back for Monday when they will ring me and open the account over the phone. I then need to go to a branch with id and we are away! The lady said I did not need to be an existing customer. So hopefully this is a good way to avoid the queues.
She said appointments were fllling out on the call-back and were 24 hours, so if anyone wants to try suggest you give it a go. 8)

[quinlanmd]

I have accounts with all three:

Bath is in an anniversary year. The interest rate before the start of the year had been significantly less generous than it is currently. The 5.00% includes a short-term bonus for this year only of 0.9% (IIRC).

Cheshire rate has spiralled upwards over the last year to the current respectable level (my records suggest that the previous rate quoted on the website of 0% p.a. is an error!)

Hanley tends to do its own thing with savings rates, presumably keeping a very close eye on their mortgage book. Don't rely on this society to pass on full base rate changes.

To sum up, the rates for all three should remain close to the other accounts you mentioned for this year at least. They do not, however, tend to lead the Regular Savings rate table for extended periods.

[Savvy_Sue]

I am assuming you are both tax payers - in which case a cash ISA for safe savings is the first place to put your money - as 4.2% (best paying instant access ISA) is a lot better than a taxed 5%.
Martin
So how high does the rate of interest have to be before tax to compare with best 'no tax' ie ISA rate?

I was thinking it would be better to open one of the new regular Halifax accounts than get my cash ISA sorted, but Maths never was my strong point - and they don't make it obvious!

[alexei]

It depends on the rate at which you pay Income Tax. M&S have an ISA paying .5% above Base Rate - currently 4.5%. As the Base Rate is likely to continue rising then this is likely to soon overtake the Halifax return less tax. Don't forget the Halifax account is for max 1 year and is limited to £250 pm. With an ISA you can invest £3000 before the end of this tax year and another £3000 after 6 April 2004. The Halifax rate is only a headline grabbing rate - it falls back markedly after the year is up.

[Galstonian]

I would suggest that the Halifax account is okay if you are not a tax payer but the vast majority able to invest £250/month are tax payers.

If this was available to be held in trust for children it would make a decent account but the fact that funds are rolled out to another account on the anniversary limit its use more limited than some of the building society regular savers.

I was told that a children's version may become available but have no facts about it.

[archimedes]

Hi,

Browsing through this page, I saw a question about regular savings using a lump sum, say of £2000 and feeding 2 accounts with £250 per month.

The reply was:

"Account 1: ING Direct 4.3%
Account 2: Leeds & Holbeck regular saver

You have £2000 to invest

You put £250 in Account 2 and the remainder in account 1

Every month you transfer £250 (max allowable) from account 1 into account 2. The only thing to be careful of is that you must ensure is that once you've nearly spent up the initial lump sum - you keep enough back to make the minimum monthly payments.

Does this make sense

martin"

Not to me it doesn't! ??? I did some calculations (perhaps wrongly, ::)I'm prepared to admit!) looking at the Future Value of the investments in each account and found that the total interest was exactly twice what it would have been had the £500 been fed into a single account.

Am I wrong? If so, how should a calculation like this be done (say in Excel) to show that this is a more profitable way of investing?

I used FV (rate,nper,pmt,pv,type) based on 4.3% (as in above example)

FV ((1+0.043)^(1/12)-1),12,-250,0,1)

Please correct my maths or logic! :-/

Went into the local Derbyshire branch yesterday.

They have a special offer on 'till 30 April which means you can have two regular savings accounts.

That means a minimum regular payment of £20 per month and a maximun of £2,000.

The details are in a leaflet, but I can't find them on the web site

[ED]

5.20% gross on up to £24,000 in a year trickling monthly into 2 Derbyshire BS regular-saver a/c's could certainly raise useful interest income.

The a/c is included on the Society's website here :

http://www.thederbyshire.co.uk/savi/easyacc/easyacc_keyfeat_regsav.html

Perhaps Derbyshire doesn't mention the offer, there, for 2 such a/c's being possible per customer simply because their staff are very busy currently. Last month I applied for 1, then a 2nd, & both times there was almost a week's delay bedore they were opened. Manchester Jack, bet you're lucky enough to walk in & open straight away. :-)

archimedes, sorry my brain is too tired to help you. Anyone else...?

[Galstonian]

Oh, and you can get the money from DBS without penalty by closing your account instead of withdrawing. Don't know how often you could pull this one off but it does say:

You will qualify for the bonus rate on closure if you:

Have missed no more than one monthly payment in the account year
Haven't made any previous withdrawals in the account year

[ED]

Galstonian, you're so right! :-) Derbyshire BS's Regular Savings a/c terms don't currently include competitor's usual spiel of a requirement for "12 equal monthly payments", or the like.

In fact my info-pack states :

"You can vary the amounts of your monthly payments but they must be at least £10 and not more than £1000."

Many contemporary a/c's set the amount with the 1st payment, allowing a change only on each anniversary of a/c opening. Example (for newcomers) : open an a/c with £10, pay £10 every month for a year, then you can swap it to £20 - or £100, or whatever can be afforded up to £1,000 - each month for the next year.

Skipton BS, like Derbyshire BS, allow the amount to be varied month-by-month. Useful as interest rates can become less competitive. Then they'd get only the minimum from my house-sale proceeds!

Manchester Jack is lucky being able to visit a Derbyshire BS branch, because the Society allows over-the-counter monthly deposits into the Regular Savings a/c. Most of us have to tolerate using Standing Orders, sometimes earning nil interest for 4-day periods. :-( (£'s leave bank a/c on a Thursday, arrive in Derbyshire a/c on Monday, earning nil interest Thurs+Fri+Sat+Sun.)

[ED]

Anyone here got a Yorkshire Building Society 'eSaver' a/c?

I'm considering having one (4.35% gross), but £1,000 min. balance has to be maintained, & outward BACS transfers take "up to 5 banking days". (So, nil interest for a week or more - grrr!)

My main purpose would be monthly feeding of my Yorkshire 'Monthly Saver' a/c (4.90% gross). Anyone know if this is done instantly, via Internal Transfer. Yorkshire's head office have proposed setting up a Standing Order between the 2 Yorkshire a/c's. But if that means several days without interest, no thanks! :-( I'd rather feed it direct from a Coventry BS a/c.

[ED]

5.05% gross can be earned for balances of £10,000+ in Norwich & Peterborough Building Society's monthly-payments a/c titled 'Super Saver II'.

Whilst building up to that balance (via £20 - £500 per month) 4.65% is paid for £5,000+ balance
4.40% for £1,000 balance
4.15% for £20+

I've just started an a/c, so it takes a few days to feed £500 in for April, & £500 in for May - then the £1,000 balance earns 4.40%. :-) Only 8 more months till the balance earns 4.65%. After 20 months in total it will earn 5.05% (or whatever variable rate then exists).

Very pleased with good news just in from Norwich & Peterborough BS, for those of us with a N+P 'NmG Saver' a/c (earning 4.30% gross for £1+) who loathe earning nil interest for 2 - 5 days each month whilst a Standing Order feeds a regular, monthly a/c via an external bank or BS a/c :

"the Super Saver account can be transferred into [online, by the customer] on a monthly basis."

It is not essential to set up a Standing Order from 'NmG Saver' to 'Super Saver II', so funds are transferred immediately and earn interest for every single day. The customer also has the freedom to decide which day of any given month to add £20 or more to the monthly a/c.

"The restrictions that were in place for transferring between accounts, particularly Bonds and the Super Saver have been lifted."

This news from Norwich & Peterborough makes the society's regular, monthly savings a/c the best payer (for a reasonable sum of money, that can continue from year to year) second only to Derbyshire BS (5.20%) and - for small sums - Halifax (6%, but unable to hold in a/c beyond 1st anniversary).

Coupled with Norwich & Peterborough having a cheque a/c ('NetMaster Gold') which is OK for BACS transfers to & from ING Direct, this monthly savings a/c seems an attractive prospect for the Savings Fountain advocated by Martin Lewis.

If only Yorkshire BS (+ many others) would take a leaf out of Norwich & Peterborough's innovative 'book'. ;-)

direct link to the N+P monthly a/c :

http://www.norwichandpeterborough.co.uk/savings_current/ad_super_saver2.htm

Be gentle it's my first time. ;)
Anybody try Derbyshire Building Society for a Regular Savings Account?
How about Yorkshire Building Society for Cash ISA's.

[Kazza242]

Hi Tom,

I open two Derbyshire Regular Savings accounts last week (offer for two accounts ended on 30th April).

I've set up a standing order so that money is moved from my current account to the regular savers each month as I get paid. !

I think it's a top account. !The interest rate is not as high as that of Halifax, but it has better terms e.g. between £10-£1000 per month compared to Halifax's £25-£250. !The Derbyshire also allow one withdrawal per account year and one missed payment, whereas Halifax do not allow any withdrawals to be made during their account year and I believe you aren't allowed to miss a payment.

The Derbyshire account has no fixed term which enables you to earn interest on your money for longer. The Halifax account only lasts one year before it's swept into a lower interest account and so you don't really benefit as much. !Halifax's interest rate is fixed for one year so you can't take advantage of any interest rate rises, whereas the Derbyshire interest rate is variable.

Regarding the Yorkshire Building Society cash mini ISA, I think you could get better rates elsewhere. !Their E-ISA offers 4.35% AER, but you could get 4.5% with M&S (and a guarantee to remain 0.5% above base rate until 5th April 2005). !Intelligent Finance (IF) and the Abbey (postal cash mini ISA) are offering 4.6%. !IF guarantee to remain 0.3% above base rate until January 2005 and Abbey 0.5% until 1st April 2005. !

With Bank of England Base rate rises expected this year (and likely this month) it is definitely worth opting for a cash mini ISA that comes with a rate guarantee.

[goulss]

Hi Martin,

I am a taxpayer, but my wife is not. We are about to come into some money (around £10,000) how do we maximise our savings ??

[david78]

Stewart,

You best bet is to put as much as you can into cash ISAs in your name and your wifes name. (Don't let the fact she is a non-taxpayer put you off). If you haven't used your ISA allowance this year, then you can each put away £3000.

That leaves £4000 and you should put this remainder in an account in your wifes name. She will still earn interest on this tax free. Find the best instant access account and then feed money from this into a regular savings account.

[ohit]

I just went into a Halifax branch today to sort out a Web Server and Regular Savings accounts. I now have both open, so that's fine.

However, the lady did tell me somethimg which is quite concerning and pretty much opposite to what Martin says in his article...

The lady explained how I have understood it wrong, how it is NOT 6.05% of £3k (and thus £195 gross), but instead something like £96 gross for the year. She said that the regular savings account is useless if I was going to use a lump sum to fund it (giving the above interest calculations as a justification). She was trying to sell me something else, so I politely told her to get on with what I wanted.

Personally, I will be using a monthly income to fund the regular savings account(s), but what was she talking about? Her underlining statement is basically completely opposite to what Martin says under "How to invest a lump sum?" in the article.

Please help!

[MSE Martin]

Unfortuantely she has a basic misunderstanding. She is quite correct that the interest will be around £96 for the year.

What she's missing is that i suggest drip feeding from a standard savings account and you will get interest from that as well - and the total interest over the year is more using this method. Look at it like this

Month Savings Acc Halifax
0 3000 0
1 2750 250
2 2500 500
3 2250 750
4 2000 1000
etc

So as you can see in month 4, £2000 is getting interest at say 4.7% in the savings account and £1,000 is at 6% in halfiax. This is why i call it drip feeding.

It means if you have £3000 in a savings account at 4.7%, and drip feed to halifax at 6% then your overall interest average is 5.35%, much better than just leaving it in the savings account.

Hope this makes sense

Martin

[ohit]

Thank you Martin, it makes sense now.

But now my question is... how come it's only £96/year from the halifax part only?

I've always been under the impression that it's 6.05% on £3k, but I've obviously missed something quite important.

[MSE Martin]

It is 6% but not on 3k. You only have 3k in for the last month remember. The balance you have in there starts at 0 and grows.

In effect your getting (roughly) 6% on an averge balance of £1,500

[ohit]

ding!

It's too easy to forget these simple things when you see headline grabbing rates of 6%.

Cool, so drip feeding here we come...

Cheers Martin.

[victoriapavier]

Martin - confused by the minute. I have a substantial amount to invest whilst we await a loft conversion (probably commencing in spring 05. Therefore I would like the money to earn a little in the meantime - what is the best way to cash in on an 8 month lump sum?

[Unbelievable]

what is the best way to cash in on an 8 month lump sum?

Birmingham Midshires Internet Easy Access pays 5.4% (introductory bonus lasts a year so gives a bit of leeway on your 8 months). Can invest up to £5 million - so unless your loft conversion is really swanky should be good enough :-*

[ED]

5.40% gross interest in Birmingham Midshires could be boosted for some funds to
5.85% gross in Derbyshire Bdg Society's regular, monthly savings a/c. As described above, up to £1,000 per month can be filtered into that a/c (your other half could have one too, so £2,000 per month is moved). When time comes to have little money to spare, you could reduce the monthly Standing Orders to just £10.

Unbelievable – in your experience, how many banking days does it take to move £'s in and out of Birmingham Midshires a/c? Generally, does the a/c run smoothly – any problems?

[Unbelievable]

ED - Sorry, I haven't got an account with Birmingham Midshires - I have been trawling and thought it might fit the bill for victoriapavier.

But you are right of course - she would benefit if she uses Martin's drip feed method and I don't know if that would be possible from the Midshires account or how quick they are to move money.

Do you have a Derbyshire account and, if so, do you drip feed into it from some other savings account?

[ED]

I have the Derbyshire Bdg Soc a/c for regular, monthly saving. It's drip-fed via Standing Orders arranged so funds reach the a/c as close as possible to the 1st day of each month (to maximise gaining interest @ 5.85% gross! :-))

I avoid Standing Order deposits leaving the source a/c on Thursdays or Fridays (avoiding nil interest during the weekend). My method is for £'s typically to leave the source a/c Tuesday, arrive as cleared funds in Derbyshire a/c on Thursday (earning nil interest for just 2 days).

I also have to take into consideration that the day before Standing Orders leave my source a/c, I need to fund it adequately – usually via online transfer from a savings a/c with the same financial institution. Other people rely on overdraft facilities, but I have rather a lot of regular, monthly savings a/c's to fund. (I sold my home and am unlikely to use my capital for a year; or several years; to buy another home.)

It's handy being able to go online to adjust payment-day, month by month. Hence, it's OK for funds to leave on Sept. 29th to arrive Oct. 1st. (Otherwise the £'s wouldn't earn interest with Derbyshire till Oct. 7th – because, to avoid weekend @ nil interest, departure from source a/c would be done Tuesday Oct. 5th.)

Ideas for suitable funding a/c's for Standing Orders to regular, monthly saving include :

1) Alliance + Leicester :
Premier Plus Current a/c @ 5.37% gross (5.50 AER) for up to £2,500 bal
[However, my experience has been negative, so far, of trying to set up Standing Orders via A+L (perhaps because Derbyshire Bdg Soc's a/c number for the monthly a/c is "00000000", which I've learned on MSE needs to be swapped to "99999999"?!) Also, A&L failed to respond adequately to simple email enquiries, insisting instead on lengthy telephone queuing.]

2) Norwich & Peterborough Bdg Soc :
Gold Current a/c @ 2.96% gross (to pay via Standing Order)
NetmasterGold Saver @ 5.10% (for lump sum until Internal Transfer needed to Gold a/c)

3) Coventry Bdg Soc :
CallSave Money Manager a/c @ 3.15% (for Standing Order payments)
NetSave a/c @ 4.85% (for lump sum until Internal Transfer needed – OK till 8pm Mon-Fri, 4pm Sun)

Additional suggestions welcome, folks.

Does Birmingham Midshires have a suitable a/c from which to make Standing Order payments?

Anyone know if Leeds & Holbeck's current a/c works swiftly in tandem with their Online Saver a/c (5.30% interest till next March)?

Nationwide's e-Savings (5% interest) in tandem with FlexAccount (0.50%) seems, to me, to pay too little.

Halifax plc's Web Save a/c @ 4.90% is also uncompetitive.

ING Direct's 4.89% gross (5.00 AER) is also too low for me. Likewise Egg @ 4.75% gross + Abbey's eSaver @ 4.60% (excluding 6-month bonus).

Yorkshire Bdg Soc's e-Saver (@ 5.20%), happily, has reduced minimum balance requirement to £250 (was £1,000) but I believe the Society lacks facilities for outward Standing Orders. Anyone found differently?

Personally I absolutely 100% could never recommend Cahoot to anyone. They have continually failed to provide efficient service to me, June–date, or to address my complaints about their system failures. However, I'd be interested to learn from folk with experience of successfully funding a regular, monthly savings a/c via a Cahoot current a/c that itself is funded from Cahoot's Introductory Rate Savings a/c. What procedure do you use? Do you go online on a Monday to transfer £'s from IR Savings a/c to Cahoot current a/c, and on Tuesday £'s leave via Standing Order, arriving Thursday as cleared funds in your regular, monthly savings a/c with a bdg society?

Anyone here currently fund a regular, monthly savings a/c using a combination of source accounts not listed above and earning greater interest?

[quinlanmd]

I'm using the Cahoot savings/current account method (although this is probably of limited use to others now that the 5.65% account has closed). No problems so far (although there are a few of the Reg Savings accounts that I haven't been able to check as regards receipt of monthly subs).

Cahoot's customer service may be somewhat lacking, but with the backstop of an authorised overdraft, I am comfortable with this arrangement (particularly as I can keep my regular banking separate and use the DD method to credit into Cahoot from my regular bank's accounts without losing interest).

[MSE Martin]

The Regular Savings Account article has been updated with the details of both the Abbey and Halifax's new 7% acccounts

[crana9]

I can't find details of the 7% on the Abbey site..

http://www.abbey.com/future/savings/putaside/putaside_month_sav.html is all i can find and its still the 6.5%

[david78]

Me too crana9. Halifax is still showing the old rate too. According to Martin's article, the Halifax becomes 7% from tomorrow. Don't know when the Abbey becomes 7%.

I'm going to wait until next week to make sure I get the right rate. I am going with Halifax because I already have an account there and only have about £50 or so to put away each month,

One thing I've noted in Martin's article: it says you can feed these accounts from a standard savings account. But these don't allow standing orders, or do they?

[isasmurf]

As Martin says, both accounts become 7% from tomorrow. !Confirmed through Moneyfacts (http://www.moneyfacts.co.uk/savings/charts/savings_regular.htm)

Now, I've never been tempted by these accounts previously (partly because they are offered by the top two banks on my most hated list), but perhaps this is too good an offer to miss. !

So a few questions to help me decide which one. !If I recall you can't take money out of the Abbey account during the year without reducing the interest rate, but what about the Halifax?

Both accounts require a monthly DD set-up. !No problem with that, but can the amount be changed? !I'm thinking I'd probably want to transfer money across to them quickly, and when (if) I was running out of money to transfer across to reduce the DD. !I think this would be more of an issue with the Abbey account with the higher allowed monthly transfer.

[crana9]

does anyone know:

if you opened a FRMS with abbey at 6.5% does your rate go up, or is it only open to new customers?

[crana9]

oh yeah and:

you can feed it from a savings account if you transfer money from the savings acct into the current acct..

Abbey requires SO set up not DD. you can't change the amount it's for once you have decided. you could put the max deposit in though and commit to a relatively low monthly sum, however.

[Speculator]

does anyone know:

if you opened a FRMS with abbey at 6.5% does your rate go up, or is it only open to new customers?

Just spoke to Abbey and they confirmed that the new 7.00% applies to existing savers as well as new accounts.

In other words, if you opened their 6.50% monthly saver recently, the rate will be increased to 7.00%.

from thisismoney website......

However, the most significant difference is that Abbey will pay the higher rate to existing account holders, but Halifax will not. Existing Regular Saver account holders will continue to receive 6% (4.8%). 'This is still an extremely attractive rate of interest,' says the Halifax.

[crana9]

thanks :D

[Judi]

Excuse my ignorance but what happens if you spot a better deal elsewhere and you want to move the money. Does the money have put in for several months revert to the low rate of interest for the whole time its been in that account or just the month you took it out of the account?

[thor]

I don't know but with 7% being already over 2% higher than the base rate, I don't think there will be too many accounts doing better over the next 12 months especially as the BOE is slowing down it's rate of increases. Abby are the better bet simply because they have shown a willingness not to screw over their existing regular savers and have increased their what was thought to be fixed interest rate to the new one now being offered. I'm going to treat it as a one year no withdrawal account and move on after 12 months if required.

[Judi]

I don't know but with 7% being already over 2% higher than the base rate, I don't think there will be too many accounts doing better over the next 12 months especially as the BOE is slowing down it's rate of increases. Abby are the better bet simply because they have shown a willingness not to screw over their existing regular savers and have increased their what was thought to be fixed interest rate to the new one now being offered. I'm going to treat it as a one year no withdrawal account and move on after 12 months if required.

Thanks for your reply Thor

[Robert_Sterling]

A note on Nettiquette.

Where you are following up a posting which is much higer up the screen or even off the screen it is appropriate to "Quote" all or part of such a post.
Where the post is immediately above your own it is not usually appropriate to "quote" it. ! ;) ;) ;)

Jude is a Law unto herself though.

[pookie]

just a word of warning before whooping with joy at the new 7% interest rates... if you can afford the whole £500 per month that abbey allows, resulting in a total of £6000 at the end of the year, you will have earned about £215 in interest; if you have the whole 6 grand now it's possible to put it into an account with lower interest rates but all at once- and still earn more in interest.
makes sense but easy to be seduced by the 7% figure 8)

[deemy2004]

Hi Pookie

Your making a fundemental mistake that apparantely even 'experts' in the press make. Okay lets do the sums - what would happen with the abbey £500 drip fed from a web saver (via an halifax current account)

Rates used 7% Abbey and 4.9% Web saver
Month ! ! !1 ! ! !500 ! ! ! £2.88 ! ! !web saver ! ! !5500 ! ! ! £22.15
Month ! ! !2 ! ! !1000 ! ! ! £5.75 ! ! !web saver ! ! !5000 ! ! ! £20.14
Month ! ! !3 ! ! !1500 ! ! ! £8.63 ! ! !web saver ! ! !4500 ! ! ! £18.12
Month ! ! !4 ! ! !2000 ! ! ! £11.51 ! ! !web saver ! ! !4000 ! ! ! £16.11
Month ! ! !5 ! ! !2500 ! ! ! £14.38 ! ! !web saver ! ! !3500 ! ! ! £14.10
Month ! ! !6 ! ! !3000 ! ! ! £17.26 ! ! !web saver ! ! !3000 ! ! ! £12.08
Month ! ! !7 ! ! !3500 ! ! ! £20.14 ! ! !web saver ! ! !2500 ! ! ! £10.07
Month ! ! !8 ! ! !4000 ! ! ! £23.01 ! ! !web saver ! ! !2000 ! ! ! £8.05
Month ! ! !9 ! ! !4500 ! ! ! £25.89 ! ! !web saver ! ! !1500 ! ! ! £6.04
Month ! ! !10 ! ! !5000 ! ! ! £28.77 ! ! !web saver ! ! !1000 ! ! ! £4.03
Month ! ! !11 ! ! !5500 ! ! ! £31.64 ! ! !web saver ! ! !500 ! ! ! £2.01
Month ! ! !12 ! ! !6000 ! ! ! £34.52 ! ! !web saver ! ! !0 ! ! ! £- !
! ! ! ! ! ! ! ! ! £224.38 ! ! ! ! ! ! ! ! ! £132.90
! ! !Total return ! ! ! ! ! ! ! ! ! £357.29 ! ! ! ! ! !
! ! !The combined AER is ! ! ! ! ! ! ! ! !5.95% ! ! ! ! ! !
! ! !(note 5 days taken off interest for cash transit) ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

[deemy2004]

Calcs with cahoot 5.65% as a feeder

Month ! ! !1 ! ! !500 ! ! ! £2.88 ! ! !cahoot ! ! !5500 ! ! ! £25.54
Month ! ! !2 ! ! !1000 ! ! ! £5.75 ! ! !cahoot ! ! !5000 ! ! ! £23.22
Month ! ! !3 ! ! !1500 ! ! ! £8.63 ! ! !cahoot ! ! !4500 ! ! ! £20.90
Month ! ! !4 ! ! !2000 ! ! ! £11.51 ! ! !cahoot ! ! !4000 ! ! ! £18.58
Month ! ! !5 ! ! !2500 ! ! ! £14.38 ! ! !cahoot ! ! !3500 ! ! ! £16.25
Month ! ! !6 ! ! !3000 ! ! ! £17.26 ! ! !cahoot ! ! !3000 ! ! ! £13.93
Month ! ! !7 ! ! !3500 ! ! ! £20.14 ! ! !cahoot ! ! !2500 ! ! ! £11.61
Month ! ! !8 ! ! !4000 ! ! ! £23.01 ! ! !cahoot ! ! !2000 ! ! ! £9.29
Month ! ! !9 ! ! !4500 ! ! ! £25.89 ! ! !cahoot ! ! !1500 ! ! ! £6.97
Month ! ! !10 ! ! !5000 ! ! ! £28.77 ! ! !cahoot ! ! !1000 ! ! ! £4.64
Month ! ! !11 ! ! !5500 ! ! ! £31.64 ! ! !cahoot ! ! !500 ! ! ! £2.32
Month ! ! !12 ! ! !6000 ! ! ! £34.52 ! ! !cahoot ! ! !0 ! ! ! £- !
! ! ! ! ! ! ! ! ! £224.38 ! ! ! ! ! ! ! ! ! £153.25
! ! !Total return ! ! ! ! ! ! ! ! ! £377.63 ! ! ! ! ! !
! ! !The combined AER is ! ! ! ! ! ! ! ! !6.29% ! ! ! ! ! !
! ! !(note 5 days taken off interest for cash transit) ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

[Robert_Sterling]

You can get a "Rough" answer as follows.
The average amount in each of the two accounts during the year is £3000.

The average interest Rate is !(7 + 4.9)/2

11.90%/2 ! = 5.95% !

This method is quicker than your method in your first calculation.
It takes 1 or 2 seconds.
They are both equally wrong. !
;D ;D ;D ;D ;D

[Robert_Sterling]

You don't happen to work for the Sunday Times or Chase De Vere by any chance do you? ;)

Spot the flaw in Deemy's first calculation.
N.B. Not an arithmetical error but a flaw.

[mary]

if you have the whole 6 grand now it's possible to put it into an account with lower interest rates but all at once- and still earn more in interest.


Please tell us where?

(note 5 days taken off interest for cash transit)

I'm puzzled - why 5 days, payments take place monthly - therefore not 12?

The combined AER is 6.29%

I thought the average of 7% + 5.65% = 12.65%/2 = 6.32%, or have I got it wrong?

[Robert_Sterling]

You asked why 5 days not 12.
It was 5 days for each of the 12 cheques.

[deemy2004]

Flaw ?

MOI ?

;D

It is approx right, or do you want me to go over it and oogle out the +/- £2 or £3 ?

[deemy2004]

Well come on then teach me sometin new ?

I'm looking but my eyes ain't seeing the flaw ?

Please, PLEAASEE , pLeaSe ?

You say flaw in the first calc ?

Month 1 500 £2.88 web saver 5500 £22.15

What Ive done is £500 X .07/365*30 = £2.88
Web saver 5500 X .049/365*30=£22.15

So come on give me the flaw ? Its a £6k abbey account
£500+ £5500 = £6k

come on dude, youve got me looking at the figures looking for a flaw but I can't put any of my fingers on it even the little one that usally works for most flaws is failing to put its point on the flaw.

PLeeeeeeeeeaaaaaaaaaassssssssssseeeeeeeee :-[

Also where I work i.e.Chase De Vere is my business ! :P

[deemy2004]

Come on dude, post then ?

Ive done my bit to try and get the fact as I see them and calc them to be.

If they are different then I much more want to know the actual facts then be proven right or wrong.

So how much then is the total of a websaver via the halifax current account feeding an abbey monthly saver ?

[Robert_Sterling]

The flaw is this:-

If £2.88 is correct for month one £500 @ 7% p.a. for one month minus five days then month two you would have the first £500 for a month and the second £500 for a month minus five days so that the interest in month two would be more than double the interest in month one.

In fact the £500 paid in month one loses 5 days interest each month for 12 months in your calculation.

In fact in the calculation as a whole you lose 5 days interest 78 times altogether on £500

Once in month one ... twice in month two .... thrice in month three etc etc

Love from Robert.

[deemy2004]

Hi

Ive not calced it that way. What Ive done is this calced interest at the rate of 360days instead of 365. So thats the 5 days over a year given over to transit time.

So the effective rate of return instead of 7% is 7% / 365 X 360 = 6.90411%

Cheers ! :)

[Robert_Sterling]

You arrive at your £2.88 in month one by using a calculation which assumes that if the annual rate is 7% then the monthly rate is 7% divided by 12 which is 0.583333%
That is the wrong way to work out a monthly rate.
The actual monthly rate is !0.5654145%


A little example
If the annual !rate is 12.68% the monthly rate is actually 1% !not 1.056666%

Each of the monthly figures shown for the 12 months of the halifax build up is wrong.

They start off significantly too high and end up significantly too low.

The monthly figures should not be as yours are
i.e.

Approx

1 times 2.88
2 times 2.88
3 times 2.88

etc etc

Because of various assumptions which you have made they add up to approximately the right answer.

[Shinds]

Robert,

Maybe you could just do the table again, but ur way ;)

Thanks

[Robert_Sterling]

Consider the fraction

16
64

[Robert_Sterling]

Consider the fraction

26
65

If you cancel the common factor 13 it becomes

2
5

This is a correct method leading to the correct answer.

Whereas if you rub out the six in the numerator
and you rub out the 6 in the denominator just because there is a 6 on the top and a 6 on the bottom you are also left with the right answer but the method is wrong.

[mary]

You arrive at your £2.88 in month one by using a calculation which assumes that if the annual rate is 7% then the monthly rate is 7% divided by 12 which is 0.583333%
That is the wrong way to work out a monthly rate.
The actual monthly rate is !0.5654145%


Can you explain how you reached the 0.5654145% please?

[Robert_Sterling]

We talk about a monthly rate but really there is no such thing because months do not have a standard length.
A yearly rate of 7% gives a yearly multiplier of 1.07.
I will ignore leap years which are a different kettle of fish.

OK

Yearly rate multiplier !1.07
To get the daily multiplier find the 365th root of 1.07
Using a calculator speed up this calculation.
We use to do it using 7 figure log tables in the days of old.

As people love a nice fictitious monthly multiplier we can, although perhaps we shouldn't, extract the 12th root of the yearly multiplier. ( get a dentist to help if extracting the root is painful )

This comes to 1.005654125

to get the monthly rate

Subtract one

giving .005654125

Multiply by 100 to get a percentage hence !0.5654125%

Geddit?

[Chris357]

Martin advocates the benefits of drip-feeding into regular savings accounts but Anna Bowes of Chase de Vere says,

"If you are someone who has a lump sum sitting in a poor paying account, you are better off leaving it in an account that pays less interest but pays for the whole year, rather than drip-feeding it into an account paying a higher rate" (BBC Business).

Would Martin care to comment on this?

[Robert_Sterling]

The Chase De Vere rep got it wrong.
See "THE SUNDAY TIMES GOT IT WRONG in this forum.

[Leia_Stephens]

Abby are the better bet simply because they have shown a willingness not to screw over their existing regular savers

I appreciate that Abbey is being flexible and allowing current customers to "upgrade" to the higher rate, but Abbey doesn't allow changes in the amount of the standing order, which is inflexible.

Sooner or later I have to make a decision :-[: stick with H and sacrifise 1% interest, but have the flexibility to change my standing order (between £25 and £250 each month), or move to A.

Leia

[Robert_Sterling]

Savings accounts have different rates of interest and different terms and conditions.
We all have to make up our own minds as to what suits our own situation best.
For what is's worth I would stick with what you have already got but I am me and you are you.

[essexrose]

As mentioned by Cinders (Halifax Regular Saver thread) just thought I'd mention that when I opened my Halifax R.S. earlier this year my opening investment was higher than the standing order I then set up to make the monthly investments for the remainder of the year.

I don't know quite how much extra they would allow you to invest on day 1 (mine was 33.3% higher than the regular monthly amount, but still well within the monthly parameters) but anything extra has got to help - a good lump sum that then gains interest across the whole year makes even more use of a good rate of interest than just investing a set amount across 12 months.

[dealseeker]

As an alternative to 1 year regular saver account what about this account if you can save on behalf of your child.
Scarborough Building Society.
Max contributon £150 per month.
3 year term.
Guaranteed to be 1% above base rate (Current rate 5.75%.

As tax free (providing child does not earn more than £100 from your savings (£200 if 2 parents), then the interest is tax free. Equivalent to £9.5% for a higher rate tax payer 7.2% basic rate tax payer. Beats the 7% gross rate available with Abbey and Halifax and there is 3 year guarantee and option to make withdrawals. :D

[Robert_Sterling]

There are several tangled strands in the previous post.

First getting a good rate of interest.
OK 7% is better than 5.75%.

Whether 7% Fixed is better than 5.75% variable you decide.

If you want to open an account in trust for a child then do so.

For a child you can not only open an account which is restricted to children ... e g Nationwide's Smart Account but you can also open almost any other account too.

So again 7% Abbey is a front runner.

If the money has been set aside for a child I see no point in calculating what an adult paying 40% tax would need to get to be left with say 7% after 40% tax.

[ies2000]

The simple fact is that drip feeding from a high interest account such as cahoot 5.65%, Birmingham Midshires 5.4% or even the poorer ING Direct at 5.0% is not that wonderful as you lose out earning interest for at least 3 days EVERY month while your money is being transferred (and 5 days if it goes through a weekend and even longer if it 'conveniently' gets lost!!!). It disappears into the 'Banking Back Hole' where everyone denies earning any interest from it!! YEAH!!!!

So the bottom line is don't be deceived by the 7.0% as in reality it is hardly worth it as the max you can invest is £500 a month with Abbey and £250 with Halifax.

[Robert_Sterling]

I do not get very hot under the collar at losing 2p per hundred pounds per day.

[deemy2004]

The simple fact is that drip feeding from a high interest account such as cahoot 5.65%, Birmingham Midshires 5.4% or even the poorer ING Direct at 5.0% is not that wonderful as you lose out earning interest for at least 3 days EVERY month while your money is being transferred (and 5 days if it goes through a weekend and even longer if it 'conveniently' gets lost!!!). It disappears into the 'Banking Back Hole' where everyone denies earning any interest from it!! YEAH!!!!

So the bottom line is don't be deceived by the 7.0% as in reality it is hardly worth it as the max you can invest is £500 a month with Abbey and £250 with Halifax.


the loss of 3 days is only once for each £500 transferred. And thus the loss is 3 days in TOTAL for the whole sum transferred during the 12 months.

[cloud_dog]

Guys, I think were loosing track of the benefits by trying to define absolutes.

Take me, I (we) have money in ING, we also have surplus cash from our monthly income lets say £900. Normally I sweep this into the ING but I will now be seeping the maximum into Abbey FRS and the remainder to ING.

So for someone like me I have to transfer the money to somewhere so I loose a few days interest no matter where it goes. The bottom line is that the Abbey FRS is a very good rate - 2% above ING.

I will be astonished if anyone gets the full interest rate for one year anywhere (unless they invent a year with 368 days). The reason is simple you have to deposit your money therefore (even as a one off deposit) you loose three to five days interest.

cloud_dog

[crana9]

unless of course you deposited it as cash ::)

[Mowgli]

I currently have a flexible mortgage with Virgin One account. I am paying 5.95% interest and can access money at any time.

Would drip feeding a regualr amount into a 7% savings account give me a net profit as a standard tax payer? Or a profit worth the effort?

I aasume I would have to pay tax on the 7% and I am not sure I would be left with a net gain.

[jltnichols]

Can anyone confirm which account they used when signing up to the Lloyds Monthly Saver? I looked at the one Martin recommends - the Classic Plus - but this needs £1000 to be paid in a month.

Is it, in fact, the Classic Account that people have signed up to? Apart from the pitifully low interest, there seems to be nothing bad about it.

Thanks,

Jack

[Riviera_Kid]

Can anyone confirm which account they used when signing up to the Lloyds Monthly Saver? I looked at the one Martin recommends - the Classic Plus - but this needs £1000 to be paid in a month.

Is it, in fact, the Classic Account that people have signed up to? Apart from the pitifully low interest, there seems to be nothing bad about it.

Thanks,

Jack

Yep just go for the basic classic account :)

[DoubleEntry]

First post here so if I'm way off line please don't bite me!!!

Now that A&L are offering a 5.64% Direct Saver is it still worthwhile bothering with 7% or less Regular Savers?

By my figures a £3k lump sum in a Direct Saver gives gross £169.

The same sum drip fed from a 5% Savings Account into a 7% RS gives gross £175 (allowing 3 days per month for transfer).

£6 pa doesn't seem like a lot for the effort involved - or am I missing part of the scheme?

Thanks for any help.

[heppy23]

First post here so if I'm way off line please don't bite me!!!

Now that A&L are offering a 5.64% Direct Saver is it still worthwhile bothering with 7% or less Regular Savers?

By my figures a £3k lump sum in a Direct Saver gives gross £169.

The same sum drip fed from a 5% Savings Account into a 7% RS gives gross £175 (allowing 3 days per month for transfer).

£6 pa doesn't seem like a lot for the effort involved - or am I missing part of the scheme?

Thanks for any help.

I tried doing the same calculation for what I am doing for my son (moving £50 per month from his YBS one day account into a halifax regualar saver) and it was worth about £6 per year more to do it. That means twelve trips into town to transfer £50 to my current account to cover the standing order.

Looking back I wouldn't have bothered.

[jamesd]

A&L are offering a 5.64% Direct Saver is it still worthwhile bothering with 7% or less Regular Savers? ... a £3k lump sum in a Direct Saver gives gross £169. The same sum drip fed from a 5% Savings Account into a 7% RS gives gross £175 ... £6 pa doesn't seem like a lot for the effort involved

It's more like an 18 improvement on 169, 10% more. Up to you to decide if a 10% higher return is worth having for the cost of opening an account or two and setting up some regular transfers.

The 5% and 7% give an average of 6% (ignoring it really being 6.5 months not 6 at the higher rate and ignoring transfer time). 6% - 5.64% = 0.36% and on 3000 that's 10.80 more for the pair of accounts.

But you're unfairly penalising the pair solution by using a savings rate that's too low. A former best buy, the Bradford and Bingley eSaver is currently paying 5.35% and the best payers are delivering 5.45%. Possibly some fiddling around with minimum balances changing interest rates for the last few months in there but I'll ignore that for the moment.

The average rate of 7% and 5.45% is 6.225%, less 5.64% is 0.585% and on 3000 that's 17.55 more from a pair of accounts than from the single account.

[jamesd]

I currently have a flexible mortgage with Virgin One account. I am paying 5.95% interest and can access money at any time. Would drip feeding a regualr amount into a 7% savings account give me a net profit as a standard tax payer?

You would lose money. You need 7.44% to be better off in a savings account.

Your best move is probably to get rid of that lousy mortgage deal. The One Account is one of the worst buy normal rate mortgages there is in money saving terms, unless you're both paying in and taking out 30-50% of your total mortgage amount every month. If you're paying it in and leaving it there, a normal flexible mortgage or normal offset mortgage will save you a lot of money.

[sashacat]

I've just opened an A&L direct saver giving 5.65% interest. Is it worth my while linking it with any regular saver....does anyone know? I have a regular saver with A&L and one with HSBC....and can't work out which is the best deal. Thanks

[masonic]

I've just opened an A&L direct saver giving 5.65% interest. Is it worth my while linking it with any regular saver....does anyone know? I have a regular saver with A&L and one with HSBC....and can't work out which is the best deal. Thanks
What do you mean by 'linking'? You wouldn't want to make transfers from the direct saver to a regular saver as you would lose a months interest on the balance within the direct saver each time.

[ViksB]

I am trying to find out which regular savings accounts do not require you to open a current account with them.
I can only find norwich and peterborough
and Skipton (from 15th Jan)
Are there any others?
Thank you
Viks

[DawnW]

I am trying to find out which regular savings accounts do not require you to open a current account with them.
I can only find norwich and peterborough
and Skipton (from 15th Jan)
Are there any others?
Thank you
Viks

I opened one with the Britannia back in November. Not sure if this is still available, but might be worth a look? I didn't need to open any other account with them and the AER was 7% I think.

[Dan29]

I'm in the process of opening the Britannia one but think it might be closed to new applicants now. Here are some more:

Ipswich 7.25%
Chorley (http://www.chorleybs.co.uk/Affinity/premierrovers.html) 7.25%
Halifax 7%
Abbey 7%
Yorkshire 6.75%
Principality 6.5%
Scarborough 6.25%
Bath 6.25%
Monmouthshire 6%
Leek United 6%

[Afahmaep]

I am trying to find out which regular savings accounts do not require you to open a current account with them.
I can only find norwich and peterborough
and Skipton (from 15th Jan)
Are there any others?
Thank you
Viks

If you are thinking about the 8% Regular Saver from NPBS then it does require you to to have a Gold Current Account paying in £1000 Per Month. And it is non-repeatable.

[Dan29]

Also, although you need a current account for the Lloyds TSB 8% RS, you don't need to "operate" the current account, just make sure you open a Classic account rather than Classic Plus. Then just keep £1 in there - no need to pay in regularly.

[Innys]

Dan209 - are you sure about the interest rate you have quoted on the chorley RS? When I click on your link, the rate quoted on the Chorley Premiership Regular Saver is 7.00%, not 7.25%. :confused:

[Kazza242]

Dan209 - are you sure about the interest rate you have quoted on the chorley RS? When I click on your link, the rate quoted on the Chorley Premiership Regular Saver is 7.00%, not 7.25%. :confused:

According to Moneyfacts, here (http://www.moneyfacts.co.uk/searches/savingdetails.aspx?moneyfactsid=SAVINGS001040501Ye arly), Chorley's regular saver rate was increased from 7.00% to 7.25% with effect from 1/1/2007. It looks like Chorley have been a bit slow in uploading the new rate to their website.

I created a thread detailing the Chorley rate increase in early December.

[interest Ted]

Also, although you need a current account for the Lloyds TSB 8% RS, you don't need to "operate" the current account, just make sure you open a Classic account rather than Classic Plus. Then just keep £1 in there - no need to pay in regularly.

Please be careful on this one. The form that you sign for the monthly saver actually says "you must have your main current account with Lloyds TSB....." and "..if you don't use your Lloyds TSB current account as your main current account, we can convert your monthly saver to a Guaranteed Tracker....."
This is only on the lilac form that you sign.

You can usually only apply in branch so you will sign this form and agree to those conditions, and hand the form back to the Lloyds person. However the set of terms and conditions that they actually give you (printed out while you wait), does not go into exactly the same specifics.

I understand that they review new accounts generally after one month and six months. So if you don't operate the account you could find yourself with a Tracker account instead of the 8% monthly saver.

Countering all of this, I am sure they would find it difficult to challenge whether it really is being used as your main account (they should not have access to how you use other accounts) as long as you pay a few bills out of it. Also you could of course argue that your copy of the T&C doesn't say that you need to operate it as your main account, but at that point you would be admitting that it is not your main account.

Heres a tip...if you do not want to pay all your bills from your Lloyds, pay part of each bill from the Lloyds account. The bank will not know how much your bill was for and it will increase the usage and look like you are operating it as a main account. If you are saving the maximum in the 8% regular saver then another suggestion is to upgrade the current account to a Classic Plus. You do need to pay in £1k per month, but of course £250 of that can/will go to the Reg Saver, and you probably have other regular savers that you can pay out of the remainder as well as the odd bill. Meanwhile you will be getting 4% on the dosh in the current account.

It probably boils down to how much time you have to fine tune (play with) your finances, as well of course as your financial position.

Ted

[mary]

Dan209 - are you sure about the interest rate you have quoted on the chorley RS? When I click on your link, the rate quoted on the Chorley Premiership Regular Saver is 7.00%, not 7.25%. :confused:

I rang them yesterday as I was interested in this account and queried it with the woman. She apologised and said she had forgotten to update the Affinity page and she would be doing it. Yes it's 7.25%