The Halifax 7% Regular Savers Account

jaydog_2 · 27 April 2006 at 11:40AM

I am with the Halifax and have been for years I am running an ISA with them at the moment which is 4.75% int. The Regular Savers Account is 7% int. which I am allowed to also run alongside my ISA.

But it is taxed, I am not the to sharp on saving details, so I am trying to ascertain, would it be good to start one of these ? or would it be wiser to put more savings in my ISA. I am trying to fuigure out if the tax on savings would make it fruitless and better to stick all cash into the ISA instead.

Any help or clues from savings savy money savers would be greatly appreciated with thanks. :think:

grumbler · 27 April 2006 at 12:52PM

See Alliance&Leicester 10%pa v Tax Free (Isa etc) recent thread. For the Halifax 7% account net rate is 7%*0.8=5.6%....

Bisoy · 27 April 2006 at 1:31PM

Hi there. If you have spare cash use your full ISA allowance now as it is tax free guaranteed and if you still able to put away some extra cash Halifax regular saver of 7% is not bad and as what Grumbler said A & L offers 10% regular saver account if you open a new premier current account with them. Hope that helps.

Kazza242 · 27 April 2006 at 1:44PM

jaydog wrote:

I am with the Halifax and have been for years I am running an ISA with them at the moment which is 4.75% int. The Regular Savers Account is 7% int. which I am allowed to also run alongside my ISA.

But it is taxed, I am not the to sharp on saving details, so I am trying to ascertain, would it be good to start one of these ? or would it be wiser to put more savings in my ISA. I am trying to fuigure out if the tax on savings would make it fruitless and better to stick all cash into the ISA instead.

Any help or clues from savings savy money savers would be greatly appreciated with thanks. :think:

I agree with what Bisoy has said above. You should aim to use up your mini cash ISA allowance first, especially if you aren't going to dip into the money. Don't be fooled by the high interest rates that most of the regular savers pay. Most of them, (except Scarborough) sweep the money out after just one year, to a lower-paying savings account, so you don't get the benefit of compounding. Whereas with a mini cash ISA, after the money has built up, you get the benefit of tax-free compound interest each year.

I use my ISA allowance first, then I put money into my regular savers (of which one is with the Halifax @7%) and then some money into a normal, easy access savings account for emergencies. When my Halifax regular saver matures, each April, I transfer the money (capital) into my mini cash ISA at the start of each tax year.

bristol_pilot · 27 April 2006 at 7:30PM

It depends on how much you have to save each month and for how many years you want to pay in. I have several regular saver accounts - including the Halifax 7% one - but I fill my mini-cash ISA first (with £3000 on the 6th April).

The Halifax saver is easy to open and run, especially if you are a Halifax customer already like me. If I weren't, I may not have bothered due to the low maximum monthly amount you can pay in (£250 I think) and the fact that the whole balance is swept into another account at the end of one year. The total interest over one year is not that much, only ABOUT £85 after tax.

If you want to save more than that each month but still over a 1 year period, check out a branch based regular saver from Stroud & Swindon - also paying 7% but allowing up to £1000 pm to be paid in. If you want to save over several years, there are other regular savers that pay a lower rate, but on the whole balance that accumulates over several years and the rate is still much better than a typical instant access account. I have had one of these with Leeds BS for many years.

Milarky · 28 April 2006 at 12:42AM

Halifax saver is easy to open and run, especially if you are a Halifax customer already like me. If I weren't, I may not have bothered due to the low maximum monthly amount you can pay in (£250 I think) and the fact that the whole balance is swept into another account at the end of one year. The total interest over one year is not that much, only ABOUT £85 after tax

Remember that you have to open another Halifax account to receive the swept funds. If you open a Websaver on the same day and put 12 month's payments in with a standing order set up to the Regular Saver then both accounts earn interest and the maximum amount payable after 12 months is dictated by when in the month you decide to open the account and, consequently, when it matures.The Websaver is a good choice because the interest rate is competitive - currently at 4.5%

Eg Open account on last day of a month. Set standing order to first day of each month thereafter. There will be thirteen payments in during the first twelve months - effectively an extra payment made on opening. Although these are then swept out on the anniversary, you will get the maximum interest in the second year also - albeit based on 12 payments only up until second anniversary - and so on.

My estimate of the interest you could earn is a lot more than the '£85' quoted above, therefore:

In the first year you could receive 6.055% gross (4.844% net) on a combined balance of £3250 (£157.44). That would be £113.24 from the Regular Saver and £44.20 from the Websaver

bristol_pilot · 28 April 2006 at 7:10PM

I did say 'ABOUT' - meaning a rough calculation to make a point. £85 after tax is £106 gross, not that different to the previous poster's more exact figure. What I actually got from my Halifax 7% saver over the last year was £90.52 after basic rate tax - about £32 (less than £3 per month) more than if the same average balance had been kept in the Websaver in the first place. Some people would consider this worth sending off all their id for etc... some of us wouldn't. Hence this account may be better suited to those who already bank with Halifax. I do not consider it reasonable to count the balance in the Websaver towards the interest on the Regular Saver in the second year, Halifax would not be allowed to do so.

YorkshireBoy · 28 April 2006 at 7:30PM

bristol_pilot wrote:

I did say 'ABOUT'...

You're too sensitive!

I do not consider it reasonable to count the balance in the Websaver towards the interest on the Regular Saver in the second year, Halifax would not be allowed to do so.

I think the point Milarky was making was that a basic rate tax-payer could make 4.844% net ad-infinitum on a one-off £3K deposit by putting the £3K in a websaver, transferring £250 per month from here to the regular saver, sweeping the regular saver balance back out to the websaver after 12 months, and then starting all over again with the same capital.

WaltD · 29 April 2006 at 8:53AM

Milarky wrote:

Remember that you have to open another Halifax account to receive the swept funds. If you open a Websaver on the same day and put 12 month's payments in with a standing order set up to the Regular Saver then both accounts earn interest ...

Are you allowed to set up Standing Orders from a Halifax Websave Account? When I set up mine last year, this didn't seem to be possible, so every month I had to manually transfer £250 from my Websave Account to my Current Account, then use a Standing Order from the Current Account to fund the Regular Saver Account. This was (1) a hassle and (2) the cause of the loss of a few days' interest each month.

System · 29 April 2006 at 9:56AM

WaltD wrote:

Are you allowed to set up Standing Orders from a Halifax Websave Account? When I set up mine last year, this didn't seem to be possible, so every month I had to manually transfer £250 from my Websave Account to my Current Account, then use a Standing Order from the Current Account to fund the Regular Saver Account. This was (1) a hassle and (2) the cause of the loss of a few days' interest each month.

Yes i do it. Both my regular savers are funded from the previous years money i saved and that was transfered into my websaver. Its my favourite saving account i must say as i have to do nothing apart from check it from time to time.

schiff · 1 May 2006 at 1:39PM

Interesting all that - thanks!

I'm into my second year with the Halifax Regular Saver and linked Websaver. Very useful I find for my 'swilling around' money.

I funded my first year's subscriptions from an outside current account and lost the usual few days' interest due to the transferring time (eg. leaves the current account on a Thursday, hits the destination account the following Tuesday = 5 days).

When year one matured, I was not unhappy with the interest rate (a bit more then the current 4.5% IMMSMR?) and left it in the Websaver, drawing on it whenever I needed the cash. Never dawned on me to use it to fund the new year's Regular Saver and I thought I was good at this sort of thing

!!

Which leads me to an important point: when I do inter-account transfers where I have my current account and a linked savings account, they take effect the same day. Does this happen with standing orders from the Hfx Websaver to the Hfx Regular Saver? Sounds as if judi would know from actual experience?

Next time it would be a nice little earner in terms of extra interest gained.

The Halifax 7% Regular Savers Account

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