Regular Savings @ 6% vs TSB 5%
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Drebin911
Posts: 71 Forumite
Good Morning Money Savers!!
Just a quick question -
If I were to be able to save say £300 or £250 per month into a 6% Regular Saver (like M&S or First Direct) would this net me more vs Drip Feeding into a 5% saver such as Nationwide or TSB ?
It seems obvious ( I know), but a lot of the people on these boards seem to use just the 5% 'savers', and over look the Regular savers for some reason (maybe the flexibility of the 5% accounts vs Regular savers offering 6% ?)
So, just for clarity if I was paying a regular amount in per month it would net me roughly 20% more interest?
And the 5% accounts are still vastly superior for cash savings in a lump sum ?
Kind Regards
Joe
Just a quick question -
If I were to be able to save say £300 or £250 per month into a 6% Regular Saver (like M&S or First Direct) would this net me more vs Drip Feeding into a 5% saver such as Nationwide or TSB ?
It seems obvious ( I know), but a lot of the people on these boards seem to use just the 5% 'savers', and over look the Regular savers for some reason (maybe the flexibility of the 5% accounts vs Regular savers offering 6% ?)
So, just for clarity if I was paying a regular amount in per month it would net me roughly 20% more interest?
And the 5% accounts are still vastly superior for cash savings in a lump sum ?
Kind Regards
Joe
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Comments
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Absolutely.Joe_Cocaine wrote: »...It seems obvious ( I know),
Don't know about "a lot", but I guess they are just lazy.but a lot of the people on these boards seem to use just the 5% 'savers', and over look the Regular savers for some reason (maybe the flexibility of the 5% accounts vs Regular savers offering 6% ?)
In fact many people have several regular savers.
This depends on the amount and what you compare.So, just for clarity if I was paying a regular amount in per month it would net me roughly 20% more interest?
5% is better than feeding 6% regular saver from a 0% account.
If you feed 6% from 5% this makes you ~0.5% gross extra, i.e.~£18 per £3.6K.
Well this depends on how you define 'vastly' and how big is the sum.And the 5% accounts are still vastly superior for cash savings in a lump sum ?
As above, by using 6% regular saver correctly you can earn ~£18 gross p.a. on £3.6K as compared to 5% accounts.0 -
Regular savers are great for two things
1. People who don't have savings but want to start putting earnings aside from regular income.
2. People with savings who want to get a better return.
It only works if you can lock the money away for a year though. I have two RS that end soon, but as I'm extending my house I won't start them again as I'll need the money.
If you just have a £4000 lump sue you'll do better by opening 2xTSB accounts (one joint) for 5% than leaving the money in a 0% current account and saving £300 monthly at 6%. You do the best if you use the 2xTSB 5% accounts and then shift £300 monthly to 6%, but as it's not too much extra reward for the 'hassle' of opening more accounts (you need a first direct current account, an M&S current account, or a HSBC advance current account to get the 6% RS), many people can't be bothered.0 -
If you have the maximum amount in the current accounts offering 3 to 5 per cent then the regular saver is the next best account. I have a regular saver with firstdirect (allows up to £300 per month interest rate 6%) and Lloyds club (allows up to £400 per month interest rate 4%)
I "estimate" if you pay in the full amount allowed each month at the end of the 12 months you would receive £92.69 net for first direct and £82.63 for Llloyds club."Look after your pennies and your pounds will look after themselves"0 -
Why 'next'?
If you have even, say, £2.5K in a 5% account, a 6% regular saver has a higher priority than another 5% account, not to mention 3%.0 -
Joe_Cocaine wrote: »Good Morning Money Savers!!
Just a quick question -
If I were to be able to save say £300 or £250 per month into a 6% Regular Saver (like M&S or First Direct) would this net me more vs Drip Feeding into a 5% saver such as Nationwide or TSB ?
It seems obvious ( I know), but a lot of the people on these boards seem to use just the 5% 'savers', and over look the Regular savers for some reason (maybe the flexibility of the 5% accounts vs Regular savers offering 6% ?)
So, just for clarity if I was paying a regular amount in per month it would net me roughly 20% more interest?
And the 5% accounts are still vastly superior for cash savings in a lump sum ?
Kind Regards
Joe
For the sake of clarity
the '5% savers' which you mention, with Nationwide and TSB, are actually current accounts, not 'savers'.
The lines between savings accounts and current accounts have become blurred as more providers seek to grow market share by offering good interest rates on their current accounts, while rates on savings accounts remain very low
However, they are very different products, and not always interchangeable
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Thanks for all the replies guys.
And Yes Badger, I agree that the lines have been blurred so much with savings and accounts and current accounts which act as savers
My situation currently is
£2500 in Nationwide flex account, (current) earning 5%
£1500 in TSB Current account plus earning 5%
(This money is stoozed, so in 12 months will be used to pay off credit cards currently on 0%)
I have another TSB plus account ready for another 2k of savings once the first is filled up.
My circumstances have changed, meaning I will now be able to save around 3-400 per month from next month - Should I just load this into 5% current accounts until I fill them up? And then move onto the 6% regular saings as offered by M&S and HSBC.
Although as Grumbler pointed out, the extra is fairly small amount extra.0 -
Joe_Cocaine wrote: »Thanks for all the replies guys.
And Yes Badger, I agree that the lines have been blurred so much with savings and accounts and current accounts which act as savers
My situation currently is
£2500 in Nationwide flex account, (current) earning 5%
£1500 in TSB Current account plus earning 5%
(This money is stoozed, so in 12 months will be used to pay off credit cards currently on 0%)
I have another TSB plus account ready for another 2k of savings once the first is filled up.
My circumstances have changed, meaning I will now be able to save around 3-400 per month from next month - Should I just load this into 5% current accounts until I fill them up? And then move onto the 6% regular saings as offered by M&S and HSBC.
Although as Grumbler pointed out, the extra is fairly small amount extra.
As long as you're sure you can meet the T&C of the 6% Regular Savers, then you might as well go for it.
FYI, First Direct are known to be choosy about who they accept, and HSBC has a pretty rigorous application process:(. It also needs the current account to be funded by at least £1750 per month, which may or may not be a problem for you. M&S online banking isn't the most user friendly, and needs a Secure Pass thingy
Having said that, I am an experienced multi accounter and have all 3, plus the 3 Regular savers, and I manage them ok
Read around the T&Cs and come back if you have any more questions.0 -
If you're going to be saving £300 extra per month, why bother with a 5% account when you can have a 6% account......?
That's what the thread that you started is about!
But you will need an extra current account with the provider of the RS. Up to you whether it's worth it. But if you decide it isn't worth it then you have expertly answered your own question in post 1!0 -
As long as you're sure you can meet the T&C of the 6% Regular Savers, then you might as well go for it.
FYI, First Direct are known to be choosy about who they accept, and HSBC has a pretty rigorous application process:(. It also needs the current account to be funded by at least £1750 per month, which may or may not be a problem for you. M&S online banking isn't the most user friendly, and needs a Secure Pass thingy
Having said that, I am an experienced multi accounter and have all 3, plus the 3 Regular savers, and I manage them ok
Read around the T&Cs and come back if you have any more questions.
Cheers for the reply, I think I'll apply. The M&S Bank account seems the best one to go with, as I don't think First Direct or HSBC would take me on! they're bloody annoying those little security keyboards, I also have a number of accounts and have managed to get by so far with (Halifax,Lloyds,TSB,Santander,Tesco and Nationwide) without using one of those passes!If you're going to be saving £300 extra per month, why bother with a 5% account when you can have a 6% account......?
That's what the thread that you started is about!
But you will need an extra current account with the provider of the RS. Up to you whether it's worth it. But if you decide it isn't worth it then you have expertly answered your own question in post 1!
Yup, more like an internal conversation with myself in front of the internet! Good job this board is so helpful and not too judgemental eh
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You do know M&S also requires a "pass"?Joe_Cocaine wrote: »Cheers for the reply, I think I'll apply. The M&S Bank account seems the best one to go with, as I don't think First Direct or HSBC would take me on! they're bloody annoying those little security keyboards, I also have a number of accounts and have managed to get by so far with (Halifax,Lloyds,TSB,Santander,Tesco and Nationwide) without using one of those passes!0
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