Savings at 7.17% after tax

Gorgeous_George

Hi

Halifax are offering 10% on a regular saver.

Save between £100 and £2,000 every month for 12 months by standing order only and get a great rate that's fixed for the year. So you know exactly how much you'll get back on your account and when.

I also have an offset savings account with Britannia at 5.74% (effectively tax free).

So, if I fund the regular saver with £2,000 per month from £24K in my offset account, I calculate that the return is £654.98 from Britannia and £1,065.85 from Halifax making total interest of £1,720.83 or 7.17% after paying basic rate tax at 20%.

Is money in a Halifax Offshore account protected?

There will be some lost interest as transfers take place but are there any more flaws in my plan.

GG

exel1966

Gorgeous_George wrote: »

Is money in a Halifax Offshore account protected?

Compensation Schemes

[FONT=Arial,Arial][FONT=Arial,Arial]All accounts are held at the Isle of Man branch of Bank of Scotland International Limited and deposits are covered by the Depositors' Compensation Scheme contained in the Banking Business (Compensation of Depositors) Regulations 1991. [/FONT][/FONT][FONT=Arial,Arial]

[FONT=Arial,Arial]Payments under the scheme are limited to 75% of the first £20,000 (per customer not account), subject to a maximum payment to any one depositor of £15,000. [/FONT]

Deposits made in the Isle of Man are not covered by the UK Financial Services Compensation Scheme.


HERE
[/FONT]

Paul_Herring

Gorgeous_George wrote: »

I also have an offset savings account with Britannia at 5.74% (effectively tax free).

So, if I fund the regular saver with £2,000 per month from £24K in my offset account, I calculate that the return is £654.98 from Britannia and £1,065.85 from Halifax making total interest of £1,720.83 or 7.17% after paying basic rate tax at 20%.

I'm not sure about those numbers.

£2000 * 6.5 * 5.74% = £746.20
£2000 * 6.5 * 10% * 80% = £1040

Is money in a Halifax Offshore account protected?

Not by the FSCS

There will be some lost interest as transfers take place but are there any more flaws in my plan.

At most £2000 * 10% *3/365 = £2.26

Milarky

Paul_Herring wrote: »

At most £2000 * 10% *3/365 = £2.26

(per payment!) That's £2000 * 12 * 10% *3/365 = £19.72...

Surely Halifax International has a sort code that accepts faster payments?

sdooley

Milarky wrote: »

(per payment!) That's £2000 * 12 * 10% *3/365 = £19.72...

Surely Halifax International has a sort code that accepts faster payments?

Not per payment - each payment is not of £2000:rolleyes:

Milarky

sdooley wrote: »

Not per payment - each payment is not of £2000:rolleyes:

What GG (the OP) said:

So, if I fund the regular saver with £2,000 per month from £24K in my offset account...

...There will be some lost interest as transfers take place but are there any more flaws in my plan.

Paul_Herring

sdooley wrote: »

Not per payment - each payment is not of £2000:rolleyes:

Each payment is of £2000. I sit corrected on this point. (I'd like more scrutiny of my other calcs however...)

YorkshireBoy

Paul_Herring wrote: »

(I'd like more scrutiny of my other calcs however...)

FWIW Paul, I agree with your figures.

The cost (in terms of additional interest incurred on the mortgage) is £746.20.

The apparent gain is therefore £1,040 - £746.20 = £293.80

Allowing for 6 days (more realistic?) with each transfer, the true gain is £254.36 for the year.

Plus there will be a small additional loss incurred whilst the £24,000 is being sent back to the offset.

sloughflint

Gorgeous_George wrote: »

Halifax are offering 10% on a regular saver.
I also have an offset savings account with Britannia at 5.74% (effectively tax free).

So, if I fund the regular saver with £2,000 per month from £24K in my offset account, I calculate that the return is £654.98 from Britannia and £1,065.85 from Halifax making total interest of £1,720.83 or 7.17% after paying basic rate tax at 20%.

I make it 6.96%.

2000*6.5*0.1*0.8=£1040
2000*5.5*0.0574=£631.40
total interest £1671.40 ie 6.96% not including loss of interest in transit.

I suppose loss in transit equates to 72 days @5.74% if had stayed in the account so a loss of 2000*72/365*0.0574= £22.64 bringing the rate down to 6.87%.

YorkshireBoy

sloughflint wrote: »

I make it 6.96%.

2000*6.5*0.1*0.8=£1040
2000*5.5*0.0574=£631.40
total interest £1671.40 ie 6.96% not including loss of interest in transit.

You're assuming the funds are currently earning interest with Britannia.

Unless I'm missing something the funds are currently offsetting GG's mortgage...note the use of the words "offset account" and "effectively tax free" in the OP.

sloughflint

YorkshireBoy wrote: »

You're assuming the funds are currently earning interest with Britannia.

Unless I'm missing something the funds are currently offsetting GG's mortgage...note the use of the words "offset account" and "effectively tax free" in the OP.

Oh, I thought it was just an offshore savings account ( brain read offshore rather than offset) with some sort of tax free status.Get it now. Mixing words up.