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[MSE Martin]

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[mistral]

Martin I have this system exactly in place.

But with the added pleasure off Egg paying interest on their own money , this being after the credit card transfer .

I do worry a little at the slight loss of inteterst with moving the money out of my ING account .

I will await my year projections for interest profit .

You could start some test case examples on the site .

I have also got the phone tariff working nicely .

Credit cards are different as I think it does not pay to go for broke ,but massage the system carefully .

I may be missing out on interest this way however !!

You may have forgot one loophole which is saving within your childs account .

I know you have not got any yet ( is the sky lady single ,)

but you can save within them as long as the total gross interest for the year does not exceed £100.

I may have a few of these figures wrong so I await a telling off from Lisyloo .

Now have we missed anything else ?

[MSE Martin]

Sounds good to me MC.

I just checked - i did put a note about child accounts in the Savings Fountain - and it is an important one. However if you are simply using it as a tax break. It is important to do it carefully - and i didnt want to confuse the issue

Martin

[isasmurf]

Noticed one small error in your article Martin. The cash ISA limit goes down to £1,000 from April 2006, not 2005 as you had said.

[MSE Martin]

Slip of the keyboard... thank you.... I've changed it

Dear Martin,

Regarding the Savings Fountain - great system! I already have it in place. Just an update on some details:

The Derbyshire Regular Savings Account now allows monthly deposit of between £10 and £1000. Also, until 30 April 2004, they will allow you to open two accounts, therefore allowing £2000 pcm!

Wish I had that kind of money!

Dear Martin

I'm confussed!

I have arranged to open a mini cash ISA this year and will pay another £3000 into it in the new tax year - no problem.

I also have savings in an ING account which I was going to drip feed into the suggested Halifax Regular Saver Account. Here is where I'm confussed - the assistant in the Halifax advised me that if I put £250 per month into the Halifax Regular Saver at the end of the year I would get £98 gross interest. Whereas if I left my £3000 in the ING account at 4.5% I would get £135 gross interest at the end of the year. Therefore it makes more sense to keep my money where it is in the ING account.

What you are saying is a good idea but as I said I am now rather confused and would welcome your comment.

Many thanks

[MSE Martin]

You've forgotten if you put £3000 into halifax it'll take a year to get it all there. !However you will still be getting interest on the remainder in ING

think like this

Month 1 ! HAlifax £250 !ING £2,750
Month 2 Halifax £500 ING £2,500
Month 3 Halifax £750 ING £2,250
etc

so as well as the halifax interest, the money in ING is earning interest too. !Total these together and you get more interest than ING alone.

This is all in the calculation. !I've seen elsewhere on this site people saying Halifax doesn't really pay the 6.05% because of the drip feeding. !So let me clear it up.

The way to think of it isn't Halifax pays less, but effectively you're not investing £3000. !Over one year with halifax the average investment amount is roughly £1,500. !Providing your drip feeding from another account then its the best way - thats one of the reasons I invented the fountain

martin

Martin

Many thanks for your quick reply. !It all makes sense now! !

It might be of interest to you but the assistant in my local Halfax turned me away from this account and told me she had done the same with other people who were in a similar situation to myself.

No longer Confused

[Margaret_Millne]

Martin

I have a Halifax Monthly Saver, with its anniversary in July. I was paying £500 a month into this, which I have now split £250 to this account and £250 to the new regular saver.

Come July, I will no longer be able to support payments to both, although I understand the Monthly Saver can continue, and receive the bonus each year.

My question is:

Would it be worth my withdrawing enough from Monthly Saver Account at the beginning of August to be able to put it into the Ing Direct account, and start the drip feeding process all over again, or would I be better just putting it back into Ing Direct and leaving it there?

This is good advice, but I have another line of question;

I have c.£5k capital to come back from a maturing Tessa... would it make more sense to knock £5k off my motgage & avoid interest payments (currently 5.25%) for the next 5 yrs, or invest same in one of the best-buy TOISAs ?

[Ebenezer_Screwj]

Martin, I have the Savings Fountain in place and have three points for discussion.
1) You say that when a regular savings account is "full", another one may be opened elsewhere. Surely, if funds permit (from a lump sum drip-feed, say) two RS a/c's could be opened to run in tandem to the maximum.
2) Your advice to "drip-feed a regular savings a/c with a standing order from a normal savings a/c" would not work (not with ING Direct anyway) because savings a/c's do not support standing orders. A manual transfer would be needed and care taken to remember to do it each month.
3) ING Direct pays high rate interest, currently 4.50 % pa gross, but PAID MONTHLY. I will be interested to see what the interest netts out to after basic rate tax, because institutions usually offer a lower rate of interest when it is paid monthly. Maybe ING calculate theirs on a different basis.

[Galstonian]

With ING you can setup transfers in advance so you can set up a "pseudo standing order".

I have to admit the theory is exactly the same as the "leaky bucket" principle. !Pour your savings into the bucket at the top, holes drip feed ones that can't take lump sums and poorer rate accounts catch any "overflows". !Needs a picture really I suppose.

ING is paid monthly but calculated daily.

[ED]

<< With ING you can setup transfers in advance so you can set up a "pseudo standing order". >>

Galstonian, this is excellent news! Anyone here know of any bank or building society that doesn't accept monthly payments for 'regular saver' accounts done in this way?

[Fastflys]

Hi Ebenezer_Screwj

ING gross interest rate paid monthly is 4.41% [3.528% net if standard rate tax payer]

Dear Sir

I am a new member of the 'MSE' family, but becoming adicted fast.

OK, I've got the £3k in the ISA (Marks & Sparks).

The bulk of my 'fortune' is stored in ING @ 4.5%

I need the intermediate 'Regular' bit in place, I go for Halifax @ 6.05% (let's be greedy).

The trick is moving the funds from ING to 'Halibut' simply and at the right time to maximise the profit, my understanding is a second Halifax is required, yes?

Hence, ING - Halifax - Regular.

Now there is a transfer delay ING to Halifax, say three days, where is my money in that period, I assume I'm getting interest from someone. I suspect ING pay until received by Halifax, again the transfer from Halifax to Regular should be dynamic with no delay.

But before you start the process, you must throw a double six.

Regards

[ED]

Welcome, not-so-Gullible Pauper!

Interesting point you raise - concerns me, too...

Halifax require the 'Regular Saver' a/c to be opened alongside a 'Web Saver' or other suitable Halifax a/c (to receive the £'s one year hence). So, for the reasons you state, I'm experimenting by making my April deposit to Halifax 'Regular Saver' via Standing Order from Halifax 'Web Saver' a/c.

Any MSE already doing this for Halifax's other regular, monthly a/c? If so, is a SO necessary, or could we instead just do a manual online "internal transfer" any day in each month?

I'm told my 'Regular Saver' will be credited same-day, instead of nil interest for 2 banking days, as happens when a SO leaves a non-Halifax a/c (eg on a Thursday) before reaching the Halifax 'RS' a/c (eg on a Monday) - 4 days with nil interest, bah, humbug!

[robnye]

any delay in the posting of money into an account sent from another bank/bs is in the hands of the sending bank....... and not the receiving.

I regularly transfer money from one account (bank) to savings, the only one that doesnt penalise me in any way is the bank to savings transfer where both accounts are with the same bank (ie A&L)

this is how most uk banks/bs use our money in this way for their own intentions......! !>

Thank you for your welcome Mister Ed

Exploring the situation a little deeper, please correct me if I'm wrong. (I'm sure someone will be only too pleased to do so)

OK, I play the game £3k into Halibut on the drip, which means per annum I have an average of £1.5k in ING & £1.5k in the Halifax.

This draws interest at:

Halifax £1.5k @ 6.05% = £90.75
ING £1.5k @ 4.50% = £67.50

Total = £158.25

Leaving it in ING (no hastle).

ING £3.0k @ 4.5% = £135.00

I therefore increase my interest by £23.25

Bearing in mind the lost days of interest shifting it about the system (it's in limbo).

Reduces the saving again, knock the £3.25 off.

Profit, say £20.00

Less tax, leaves say £16 profit

However, let's not forget the other expenses, petrol, stamps, 'your time', whatever.

Also, remember miss a payment, etc

Is it worth it.

Please tell me where my calculations are faulty, it seems the benefits are 'buttons' for all the work.

[Galstonian]

If you are going to use a regular saver account it is much more beneficial if you can leave the money after it has built up - unlike the HFX which forces your money out after 1 year. Look at Martin's recs for accounts, the rates are around 5% rather than 6 but after more than a year it makes sense.