Savings at 7.17% after tax

meester

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.

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%.

I make it 6.957%, which is close enough. Depends on the date of payment, a lot of the time you lose more than 3 days' interest, due to weekends, bank holidays etc.

slopemaster

Yeah, I was trying to work this out for my similar circumstances.
I am non-taxpayer; the money would otherwise get 6.5% in B&B account.
So if I transfer 2000 a month, I gain half of (10%-6.5%) x 24 000
ie 420 pounds.

But it takes 4 working days for BACS from B&B to current a/c, and 3 working days for SO from current a/c to Halifax. (No, its not possible to go direct)
So 7 working days is 10-12 days lost interest each month.
So say 11 x 12 /365 x 6.5% x 24 000 = 564 pounds (I think that's right?)
So I would lose more than I would gain.

True you could reduce the SO from 2000 to 100 after 6 months, so you earned more and lost less, but its prob not worth the hassle is my conclusion.

YorkshireBoy

slopemaster wrote: »

True you could reduce the SO from 2000 to 100 after 6 months...

Why would you choose to earn 6.5%/365 when you could be earning 10%/365 on the same money each day?

sloughflint

slopemaster wrote: »

Yeah, I was trying to work this out for my similar circumstances.
I am non-taxpayer; the money would otherwise get 6.5% in B&B account.
So if I transfer 2000 a month, I gain half of (10%-6.5%) x 24 000
ie 420 pounds.

But it takes 4 working days for BACS from B&B to current a/c, and 3 working days for SO from current a/c to Halifax. (No, its not possible to go direct)
So 7 working days is 10-12 days lost interest each month.
So say 11 x 12 /365 x 6.5% x 24 000 = 564 pounds (I think that's right?)
So I would lose more than I would gain.

True you could reduce the SO from 2000 to 100 after 6 months, so you earned more and lost less, but its prob not worth the hassle is my conclusion.

Allowing for your 7 days so 9 days loss in transit ( weekends now unavoidable)
2000*(6.5*0.1+5.5*0.065)-2000*216/365*0.065=2015-76.93=£1938.07 ie 8.07%
Better than sitting in B&B.

The main flaw in your reasoning is using £24000 rather than £2000 in your calculation for loss in transit.
I make the gain 2000*(6.5*0.1+5.5*0.065-12*0.065)= £455 ;close to your £420 - just different approximation.

stevetodd

exel1966 wrote: »

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]

I have just signed up for Halifax International's regular saver. If the worst happened could my Birmingham Midshire's mortgage be offest against the lost savings? Or could it not for some reason like BM is a different subsiduary of HBOS or that Halifax INT is an offshore bank?

YorkshireBoy

stevetodd wrote: »

I have just signed up for Halifax International's regular saver. If the worst happened could my Birmingham Midshire's mortgage be offest against the lost savings?

No, although there may be a 'moral' obligation on the part of (H)BoS. See the foot of page 1 here...

http://www.halifax-international.com/download/legal-regulatory.pdf

And if you're investing 'overseas' you really should have read (and understood) this document first.

jimbow25

There's been talk on here about this account in the past I think- the main concern that I recalled was that international compensation scheme may take "many years"- per the scheme's own wording- to have enough in the fund to repay everyone in the event of a bank failing.

I don't have the wording to hand but it was in a thread about this account or a similar one- can anyone else advise?