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Regular Savings Accounts - not as good as it seems
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YorkshireBoy wrote: »You haven't thought this through very well have you? If I take money from a 6.5% paying 'clean' account and put it in a 10% paying 'regular saver' account, my aggregate interest rate is around 8.4% on the amount moved.
Now, and especially if you are retired, which would you rather have?...6.5% or 8.4% ?
And let's take it further, let's say you have £17k - you could tie up £5k for a year in the Hx GS a/c and get 12% on the Halifax RS, giving you £750pm @ 12% and £250pm @ 7.75%. That's nearly 11% on £1000 every month, 6.3% (flat 1 year term) on £5000 plus the original 6.5% holding area for the £12k - I'll let Milarky or YB work that lot out but it sounds as good as it gets to me :TYou've never seen me, but I've been here all along - watching and learning...:cool:0 -
LongTermLurker wrote: »And let's take it further, let's say you have £17k - you could tie up £5k for a year in the Hx GS a/c and get 12% on the Halifax RS, giving you £750pm @ 12% and £250pm @ 7.75%. That's nearly 11% on £1000 every month, 6.3% (flat 1 year term) on £5000 plus the original 6.5% holding area for the £12k - I'll let Milarky or YB work that lot out but it sounds as good as it gets to me :T
£6,000 x 12% / 12 x 6.5 = £390.00
£6,000 x 6.5% / 12 x 5.5 = £178.75
£3,000 x 12% / 12 x 6.5 = £195.00
£3,000 x 6.5% / 12 x 5.5 = £89.37
£3,000 x 7.75% / 12 x 6.5 = £125.94
£3,000 x 6.5% / 12 x 5.5 = £89.37
£5,000 x 6.25% = £312.50
Total interest = £1,380.93
Overall return = £1,380.93 / £17,000 = 8.12% gross
Or £275.93 more than you would have had leaving it all in the 6.5% 'clean' account.0 -
Its funny that you are all discussing this account tonight because I was just trying to work out if it was worth the aggro of opening the Guaranteed Saver (6.25%) with the £5000 to get the 12% on the reg saver. My £5,000 for this would come from Kaupthing Edge currently paying 6.5%.
I just tried to work out what the average rate would be with just the £11,000 invested in just the halifax accounts and I get 6.4%, this can't be right can it?0 -
MiserlyMartin wrote: »Its funny that you are all discussing this account tonight because I was just trying to work out if it was worth the aggro of opening the Guaranteed Saver (6.25%) with the £5000 to get the 12% on the reg saver. My £5,000 for this would come from Kaupthing Edge currently paying 6.5%.
I just tried to work out what the average rate would be with just the £11,000 invested in just the halifax accounts and I get 6.4%, this can't be right can it?
£5,000 x 6.25% = £312.50 (relates to the GS account)
£6,000 x 12% / 12 x 6.5 = £390.00 |_ relates to the Hx RS account
£6,000 x 6.5% / 12 x 5.5 = £178.75 |
so total interest = £881.25/£11000 = 8.01%
£11000 @ 6.5% (KE) would gross you £715, so the Hx option would be £166.25 more (I think)You've never seen me, but I've been here all along - watching and learning...:cool:0 -
YorkshireBoy wrote: »£6,000 x 12% / 12 x 6.5 = £390.00
£6,000 x 6.5% / 12 x 5.5 = £178.75
OK, what's the relationship of the 6.5 and 5.5 multiples above? Are you saying that the money spends just over half its time in the RS account and just under half in the feeder a/c?
So (amount transferred x Hrate) / 12 = 1 month's interest at higher rate
and multiply that by 6.5 months?
Then adding (amount transferred x Lrate) / 12 = 1 month's interest at lower rate
and multiply that by the remaining 5.5 months?
Or am I just guessing...?You've never seen me, but I've been here all along - watching and learning...:cool:0 -
martinman3 wrote: »You must be a non tax payer as those are gross figures, the gains for regular tax payers are 80% of that, for higher rate payers are 60% of that.
) is giving you the option to adapt the figures to your circumstances and me to mine.
All comparisons should be made against the AER and all banks quote the AER gross, they then take away the need for you to make your own tax calculations by providing the NET figure - your arguement is like saying "Banks are twisting the facts by not telling higher rate tax payers that they have to pay another 20% tax on top". All Milarky's omitted to do was work out your tax liability for you - I would have thought everyone was aware they had to pay tax on savings interest, unless tax exempt.You've never seen me, but I've been here all along - watching and learning...:cool:0 -
LongTermLurker wrote: »OK, what's the relationship of the 6.5 and 5.5 multiples above? Are you saying that the money spends just over half its time in the RS account and just under half in the feeder a/c?
I've never really been able to explain it as well as others but I *think* it comes from the fact that your first payment is in the reg saver for a full year, ie 12/12ths...the second for 11/12ths etc.
So, 12/12 + 11/12 + .....2/12 + 1/12 = 78/12 or 6.5
The feeder account doesn't have the 12/12ths (because your first payment leaves on day 1), so...
11/12 + 10/12 + ......2/12 + 1/12 + 0/12 = 66/12 = 5.5
Hopefully the mathematicians will spot any errors in the above.0 -
YorkshireBoy wrote: »I've never really been able to explain it as well as others but I *think* it comes from the fact that your first payment is in the reg saver for a full year, ie 12/12ths...the second for 11/12ths etc.
So, 12/12 + 11/12 + .....2/12 + 1/12 = 78/12 or 6.5
The feeder account doesn't have the 12/12ths (because your first payment leaves on day 1), so...
11/12 + 10/12 + ......2/12 + 1/12 + 0/12 = 66/12 = 5.5You've never seen me, but I've been here all along - watching and learning...:cool:0 -
LongTermLurker wrote: »I think they're right to quote gross rates - doesn't mean Milarky is a non taxpayer, but what he's doing (sorry if I've just re-assigned someone's gender again
) is giving you the option to adapt the figures to your circumstances and me to mine.
All comparisons should be made against the AER and all banks quote the AER gross, they then take away the need for you to make your own tax calculations by providing the NET figure - your arguement is like saying "Banks are twisting the facts by not telling higher rate tax payers that they have to pay another 20% tax on top". All Milarky's omitted to do was work out your tax liability for you - I would have thought everyone was aware they had to pay tax on savings interest, unless tax exempt.
All true except Milarky had quoted gains in £ and these figures only applied to non-taxpayers. Once tax was taken off, for most people, you can see the actual gain in £.0 -
I've been reading through this with intrest,I will soon have around £15,000.
Is it best to invest this in 1 account or several smaller ones.
Sorry for hijacking the post.0
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