Abbey Fixed Rate Regular Saver

deemy2004

cloud_dog,

I think the cash mini-ISA limit drops to 1k in April 2006 .

Leia

Yep

Got £3k this year and 3k next year from April 05. Then its £1k frpm April 06 onwards....

Boojum

Not sure if my sums are correct, but working on the assumption that you deposit the full 500 per month into the 7% regular saver account for the maximum of one year, actually works out at 3.8% before tax when taken over the full 6K invested. This is because only the first months deposit of 500 will attract the full 7%, the next month will attract 7 x 11/12%, the next month 7 x 10/12% and so on. This totals to an interest of around £230 for the year, which on £6,000 is not particuarly impressive. After the year is up, I was told that the interest would revert to the 'normal' rate, whatever that is at the time. :-/

Boojum

cloud_dog

Not sure if my sums are correct, but working on the assumption that you deposit the full 500 per month into the 7% regular saver account for the maximum of one year, actually works out at 3.8% before tax when taken over the full 6K invested.  This is because only the first months deposit of 500 will attract the full 7%, the next month will attract 7 x 11/12%, the next month 7 x 10/12% and so on.  This totals to an interest of around £230 for the year, which on £6,000 is not particuarly impressive.  After the year is up, I was told that the interest would revert to the 'normal' rate, whatever that is at the time.   :-/

Boojum

Boojum, you are correct but, as discussed previously (different thread) for those of us who are saving spare cash monthly the bottom line is that Abbey FRMS is ahead of anything else (ex. Halifax).

cloud_dog

deemy2004

Not sure if my sums are correct, but working on the assumption that you deposit the full 500 per month into the 7% regular saver account for the maximum of one year, actually works out at 3.8% before tax when taken over the full 6K invested.  This is because only the first months deposit of 500 will attract the full 7%, the next month will attract 7 x 11/12%, the next month 7 x 10/12% and so on.  This totals to an interest of around £230 for the year, which on £6,000 is not particuarly impressive.  After the year is up, I was told that the interest would revert to the 'normal' rate, whatever that is at the time.   :-/

Boojum

Err what abou the interest from the drip feed account ?, say 5%. Take them both together and your looking at about 6%, maybe a little less 5.85% ? close enough

Boojum

You've lost me there. If you mean the interest accrued on the previous month's interest, I calculate it to be around £15 for the year, pushing the overall rate up to about 4%.

Or am I misunderstaning you? ???

crana9

he/she is referring to the practice of keeping your "lump sum" in an account bearing, say, 5% interest and then paying the monthly amounts into the regular saver account from this account.

Milarky

Has anyone opted to credit the Abbey Regular Saver account by means other than 'standing order' [as it means keeping - or moving - £500 in your bank account]

I have a cahoot savings account which I would rather use to send the monthly amounts directly to Abbey on more convenient dates [eg avoidng Weds, Thurs & Fri by adjusting the date of transfer slightly for each month]

Clearly this would work out but Abbey have suggested that it 'has to be paid by SO' and no other method. Why? What difference would it make? I would point out that cahoot IS part of Abbey plc anyway, and that I can set up advance dated withdrawals probably for all the payments in one go. [Anyone opted for this approach instead?]

MarkyMarkD

Standing order/BGC/internet banking payment are all the same as far as the recipient is concerned.

So if you are really bothered about the entirely trivial amount of lost interest you are talking about, then you could set up each payment as a manual internet banking payment from your current account or from a savings account which allows transfers to accounts other than a linked current account ... e.g. your Cahoot savings account.

If you wanted to fund the Abbey account by future dated withdrawals from your Cahoot account, you could do so, making the payments on a Monday as they say payments take 4 working days.

Interest on £500 for 1 day at 5% is slightly less than 7p. So on a whole year's payments, that's 11 x slightly less than 7p x 2 you are worrying about ... £1.50.

deemy2004

You've lost me there.  If you mean the interest accrued on the previous month's interest, I calculate it to be around £15 for the year, pushing the overall rate  up to about 4%.

Or am I misunderstaning you?   ???

Hi Boojum,

your making a fundemental mistake in your calculation of actual return. Because only the 1st payment will be there for 12months, so obviously your not going to get 12 months interest on a payment say thats only been there for 1 month.

That's why to calculate the true rate of return you have factor in the whole £6k being fed from a drip feed account into Abbey and thus you need to add the interest earned from the drip feed account with the interest earned from the abbey account which gives you your true return over 12 months for the invested £6k which at 5% on the drip account would equate to about 5.85% gross for the two accounts combined.

Milarky

Standing order/BGC/internet banking payment are all the same as far as the recipient is concerned.

Thanks, that's exactly what I thought. But it's not just about being able to 'tweak' the dates - fun though that is - it's also partly because I am now transferring £750 [£250 to Halifax and £500 to Abbey] on the same date - 1st of the month which puts too much strain on my bank account - I am genuiely moving moving between accounts, now, rather than saving it from salary etc. If cahoot offers the option for 'do it yourself' standing orders then it is a shame that Abbey [who own cahoot] say they must receive payment by S/O but will not say why. [I asked them - and drew a blank]

Let's face it, we save for our convenience - not the banks'. Why should it be otherwise?

PS I compromised, and set up future payments via cahoot to HALIFAX today instead. the setting up worked quite well and I shall need to put less through my bank in future. I may do the same for Abbey account in a month's time