Regular Savers, a waste of time...

Lyncroft

I'm going to open a HSBC regular saver tomorrow when all the accounts change and I'm then eligible for the 8% package. Hope they don't reduce the rates tomorrow!

MrMicawber_2

Regular savers aren't just supplementary to a normal instant access. It depends what you want to do and what you have.

There's absolutely nothing wrong with regular saving accounts and they aren't a waste of time. You just need to use them effectively and if you can't for whatever reason it's certainly not the products fault.

You can't slot the different savings accounts into rigid boxes. There are all sorts of ways to combine accounts to suit you own circumstances.

Also saying if you break the rules you lose your benefit and therefore the product is rubbish is a little odd. If you can't abide by the terms and conditions regarding withdrawals then you shouldn't go for accounts that have such conditions (e.g. fixed bonds and regular savers).

fullstop

cowbutt wrote: »

FYI, I was just on the Barclays website for other reasons, and the 7.75% rate has ended now. From 1 December, it's 6%.

Have got a Barclays regular saver paying 7.75% which works out at £124 gross interest for the year , if you put the maximum £250.00 per month allowed, not much bother involved making sure you have funds in your account on the day your S/O is due out, as the Tescso saying goes "Every Little Helps"

Mr_K

Mmmm, thanks for the feedback guys. Seems a lot of you are in love with Regular Savers, but I'm not convinced. Maybe they're just not for me.
I can see why the banks love them too:-
they've got your custom for a year,
probably another account (low interest) the customer has to open to feed into it or receive the funds at the end,
guaranteed income each month from you,
a wopping (but largely irrelevant) interest rate they can plaster in the shop window.
I think they're just in for the money you know....

Lavendyr

'In love with' is a bit strong. 'See the value of in an appropriate situation' is more accurate. And I think you're right, if what you want is an easy access account to store a lump sum, a regular saver is definitely not for you.

As for why the banks love them...again, for banks, regular saver accounts have their place. Sometimes it is valuable for them to have a guaranteed income for a year, sometimes they will need an immediate boost to capital rather than periodic inflows. If the former, they're more likely to offer regular savers. If the latter, they're more likely to offer fixed term accounts. Depends on the bank's strategy and current needs. The trick is finding a bank whose capital needs mesh with your savings requirements and using what they have on offer to your best advantage.

Aegis

My mortgage payments have decreased, so I now have excess funds coming in. Will I choose a 10% regular saver or a savings account likely to be 3% or less by this time next year?

Regular savers have their place and can form part of a very good savings strategy. Not a waste of time at all if you're planning on saving anyway.

sloughflint

Mr_K wrote: »

Mmmm, thanks for the feedback guys. Seems a lot of you are in love with Regular Savers, but I'm not convinced. Maybe they're just not for me.
I can see why the banks love them too:-
they've got your custom for a year,
probably another account (low interest) the customer has to open to feed into it or receive the funds at the end,
guaranteed income each month from you,
a wopping (but largely irrelevant) interest rate they can plaster in the shop window.
I think they're just in for the money you know....

Why are you not convinced?
For each day, your money ( whether straight from income or drip fed from another savings account) was earning 1/365th of 10% instead of 1/365th of 6% if placed there instead.The rate is often fixed ( not all)
The downside is accessibility but then again some do/did allow withdrawals ( e.g LloydsTSB,Nationwide)

Mr_K

yeah, I understand the point, but there are too many restrictions and inflexibilty for my liking. You're never going to make much more than peanuts out of these accounts.

Also I'm sure a lot of people don't understand how they work. For example, a colleague was saying how delighted she was that HSBC were going to let her have an 8% regular saver. I had a hard time trying to explain why she wouldn't get 8% on the total amount invested...

Lavendyr

I honestly don't understand why some people find the concept of a regular saver (as per your colleague) so hard to understand. If you had a normal easy access account at, say, 6%, and you added £500 a month to it for a year, would you assume that over a year, you would earn 6% on £6000? Of course not - your money will only earn interest while it is actually in the account. Same with a regular saver.

Archlever

I agree with most of the posters here. My opinion is that regular savers are a good deal particularly for the lazy people like us who leave money in their current accounts earning a gobsmacking 0.1%. Yes I'd like to have several high paying savings accounts and drip feed etc etc...but I'm not organised enough to, so the regular saver gives us a way of earning (a good amount of) interest on money which would otherwise have earned zilch (well 0.1% more than zilch ). We have several of these running at present two with HSBC and one with Halifax (all paying 10%). All this adds up to a saving of £1,000 pounds a month all earning 10%: not bad me thinks!

The only other place one could get higher returns with a monthly put away was the stock market; and we all know what happened to that. My point is that unless you have a strategy for earning a greater than 10% return on your investment, the regular saver is a good option.

With regard to banks, they'll always get their pound of flesh, theyre a business and want to make money off you.