Opened reg saver with barclays today

lkmc01

I opened a monthly saver with barclays today and paid in £250 cash. I have also got the halifax regular saver.

With the halifax reg saver I have now realised that it is best opening the acount towards the end of a month and funding it straight away and then paying in on the 1st of each month thereafter. So getting 13 payments in and getting maximum interest.

but...

I can not get 13 payments in with the barclays monthly saver and the account gets transfered into their instant access account after 12 months.

So,
should I pay my second standing order into the barclays account on the 2nd (1st bank holiday) January and each month on the 1st, therefore following the same lines as the halifax regular saver or on the 19th January and eeach month on the 19th, 1 month from when it was opened, ie 1 month from today.

If I pay it on the 1st then I will end up with 13 payment going in (Dec 19th, Jan, Feb, March, Apr, May, June, July, Aug, Sep, Oct, Nov, 1st Dec 2009) and no interest at all as I had more than £3000 going into the account and broken its terms and conditions.

If I pay it on the 19th, so December 2008 until November 2009 then I will loose out on 18 days worth of interest for that month.

The account pays interest monthly on the 1st if that makes any difference.

I could do -

Dec 19th, Jan 2nd, Feb 1st, March 1st, April 1st, May 1st, June 1st, July 1st, Aug 1st, Sep 1st, Oct 1st and November 1st.

Will my account close at the end of November 2009 or on the 19th December 2009.

So will my 3000 be in from 1st November 2009 to 19th December 2009 or from 1stt November 2009 to end November 2009.

I did speak to the lady in the bank but she was even more bafled about when I was going on about :eek: so thought I'd come and ask these questions back on here.

SPACON

Hi, Just out of interest what rate did you get for your barclays account. The 6 or 7.75 %.

lkmc01

the 6% I think. thats what the lady said, but I'm still not sure.

Can you help me please with my s/o and interest dilema above.

thanks

Tibbledom

lkmc01 wrote: »

I opened a monthly saver with barclays today and paid in £250 cash. I have also got the halifax regular saver.

With the halifax reg saver I have now realised that it is best opening the acount towards the end of a month and funding it straight away and then paying in on the 1st of each month thereafter. So getting 13 payments in and getting maximum interest.

but...

I can not get 13 payments in with the barclays monthly saver and the account gets transfered into their instant access account after 12 months.

So,
should I pay my second standing order into the barclays account on the 2nd (1st bank holiday) January and each month on the 1st, therefore following the same lines as the halifax regular saver or on the 19th January and eeach month on the 19th, 1 month from when it was opened, ie 1 month from today.

If I pay it on the 1st then I will end up with 13 payment going in (Dec 19th, Jan, Feb, March, Apr, May, June, July, Aug, Sep, Oct, Nov, 1st Dec 2009) and no interest at all as I had more than £3000 going into the account and broken its terms and conditions.

If I pay it on the 19th, so December 2008 until November 2009 then I will loose out on 18 days worth of interest for that month.

The account pays interest monthly on the 1st if that makes any difference.

I could do -

Dec 19th, Jan 2nd, Feb 1st, March 1st, April 1st, May 1st, June 1st, July 1st, Aug 1st, Sep 1st, Oct 1st and November 1st.

Will my account close at the end of November 2009 or on the 19th December 2009.

So will my 3000 be in from 1st November 2009 to 19th December 2009 or from 1stt November 2009 to end November 2009.

I did speak to the lady in the bank but she was even more bafled about when I was going on about :eek: so thought I'd come and ask these questions back on here.

My advice would be to keep it simple and just pay the 12 monthly payments on the 19th.

Yes you can tinker with the payment dates and perhaps get an extra 17 days interest. But it is not 17 days interest lost in any case it is the difference between 17 days interest in this account less 17 days interest in your normal savings account. If we say that the rate is 6% (not 7.75%) and your normal savings account pays on average 4% over the year then the loss by not tinkering with dates is perhaps £2 (=0.02 x 3000 x 17/365 x 0.8) and even if the rate is 7.75% we are only talking about £4.

And tinkering with the dates you always run the risk of something going wrong.

In the meantime the extra effort could have been used to gain yourself more than £2 in relation to other areas of saving and spending.

oldfella

Yes you can tinker with the payment dates and perhaps get an extra 17 days interest. But it is not 17 days interest lost in any case it is the difference between 17 days interest in this account less 17 days interest in your normal savings account. If we say that the rate is 6% (not 7.75%) and your normal savings account pays on average 4% over the year then the loss by not tinkering with dates is perhaps £2 (=0.02 x 3000 x 17/365 x 0.8) and even if the rate is 7.75% we are only talking about £4.

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suggested correction - you dont get an extra 17 days interest - you gain by moving the 17 days of interest from the beginning of the period where there is a small amount in the account, to the end when there is a large amount. I worked this out on the 7.75 interest rate with the first payment on the 24th and subsequent payments on the first of each month, and you gained about £14 before tax.

the technique works a lot better on the Halifax RS because they allow £500 per month and 13 payments.

lkmc01

So am I better to pay the 250 across on the 1st of each month with the last one being on the 1st of November or is that the 1st December? I would prefer to pay on the 1at anyway. If I pay 1st December 2009 too than its 13 payments and this can not be done.

Also when will the account close, end of November or 19th December 2009?

lkmc01

If my last payment is the 1st November and the account doesn't close until 19th Decmber then I'll have over 1.5 months with the 3000 in.

Tibbledom

oldfella wrote: »

Yes you can tinker with the payment dates and perhaps get an extra 17 days interest. But it is not 17 days interest lost in any case it is the difference between 17 days interest in this account less 17 days interest in your normal savings account. If we say that the rate is 6% (not 7.75%) and your normal savings account pays on average 4% over the year then the loss by not tinkering with dates is perhaps £2 (=0.02 x 3000 x 17/365 x 0.8) and even if the rate is 7.75% we are only talking about £4.

---

suggested correction - you dont get an extra 17 days interest - you gain by moving the 17 days of interest from the beginning of the period where there is a small amount in the account, to the end when there is a large amount. I worked this out on the 7.75 interest rate with the first payment on the 24th and subsequent payments on the first of each month, and you gained about £14 before tax.

the technique works a lot better on the Halifax RS because they allow £500 per month and 13 payments.

With respect I disagree but I think I will have difficulty convincing you, so we will have to agree to amicably disagree.

The argument is simply that to invest the money 17 days earlier on every contribution (and get 7.75% interest for these 17 days), which is equivalent to 17 days interest on the total invested, you have to forego interest at whatever rate you could have achieved elsewhere (I guessed 4%) for those 17 days also and hence the original calculation of £2 or £4.

I have seen similar miscalculations in previous threads. The arguments always break down by overlooking the alternative interest you could have earned.

lkmc01

could we please get back to the matter in hand

oldfella

If my last payment is the 1st November and the account doesn't close until 19th Decmber then I'll have over 1.5 months with the 3000 in.

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correct - this is how you earn the extra interest

oldfella

The argument is simply that to invest the money 17 days earlier on every contribution (and get 7.75% interest for these 17 days), which is equivalent to 17 days interest on the total invested, you have to forego interest at whatever rate you could have achieved elsewhere (I guessed 4%) for those 17 days also and hence the original calculation of £2 or £4.

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completely amicably - this is not right. You cant extend the period, this is fixed at 12 months from opening the account. Forgoing interest and working out what you would have earned elsewhere is irrelevant because the period is the same in both cases.