Halifax Regular Saver 12 or 13 payments?

alared

1st £500 on 17th July then on the first of the month @ 10%

Either 12 payments or thirteen,whatever they allow.
either £6000 or £6500

rb10

alared wrote: »

1st £500 on 17th July then on the first of the month @ 10%

Either 12 payments or thirteen,whatever they allow.
either £6000 or £6500

12 payments, with the final one on 1st June 2009, would give you about £347.95.

13 payments, with the final one on 1st July 2009, would give you about £350.14.

LesU

rb10 wrote: »

12 payments, with the final one on 1st June 2009, would give you about £347.95.

13 payments, with the final one on 1st July 2009, would give you about £350.14.

That is of course before tax. So the saving would be, assuming basic rate, £1.75. Minus, of course, the amount you might have been earning on the £500 elsewhere, say at 3%, which equals 0.56p after tax. Leading to the grand sum of £1.19 profit! That half pint of beer is going to taste great when you're celebrating that extra payment.:D

Please also remember that this course of action is really only for those who caught that 10% deal. For those of us on 5% deals the numbers are halved.

rb10

LesU wrote: »

That is of course before tax. So the saving would be, assuming basic rate, £1.75. Minus, of course, the amount you might have been earning on the £500 elsewhere, say at 3%, which equals 0.56p after tax. Leading to the grand sum of £1.19 profit! That half pint of beer is going to taste great when you're celebrating that extra payment.:D

Please also remember that this course of action is really only for those who caught that 10% deal. For those of us on 5% deals the numbers are halved.

Your Maths is wrong here. Putting £500 per month into an account at 3% gives ~£97.50 before tax (i.e. £78 assuming basic rate payer). So the difference between this and the Regular Saver amount of £278.36 after tax is £180.86. That's a little more than half a pint of beer.

If you are on 5%, you can expect around £130 after tax, so you're up by £32.50.

LesU

rb10 wrote: »

Your Maths is wrong here. Putting £500 per month into an account at 3% gives ~£97.50 before tax (i.e. £78 assuming basic rate payer). So the difference between this and the Regular Saver amount of £278.36 after tax is £180.86. That's a little more than half a pint of beer.

If you are on 5%, you can expect around £130 after tax, so you're up by £32.50.

No, you missed my point, I was only talking about the 13th payment and the pros and cons of that extra one.
Unless I found an extra £500 in that last month I'd leave that 13th payment and make it the first of a new regular payment year. Anything done at end of a regular payment sequence has very little effect on the final sum.

rb10

LesU wrote: »

No, you missed my point, I was only talking about the 13th payment and the pros and cons of that extra one.
Unless I found an extra £500 in that last month I'd leave that 13th payment and make it the first of a new regular payment year. Anything done at end of a regular payment sequence has very little effect on the final sum.

Sorry about that ... I should have realised from your calculation of £500 giving 56p after tax that you weren't falling into the normal trap of thinking RS's are a bad thing.

But yes, your point is valid that it's only for such a small time that it won't make much difference.

sloughflint

Alared, regardless of whether you continue the RS, you should make a 13th payment in July.
If you do continue it on to a second year, make the 13th payment on 17th July ( after the sweep or even 18th to be on the safe side?), otherwise on the first.

The difference would be a loss of £17.81 gross if you just kept your standing order on the first and intended to continue (if the new fixed rate is still 4% at the time).

http://spreadsheets.google.com/pub?key=pLv5pWbQddSLoewKMfshhZA

sloughflint

Mikeyorks wrote: »

You won't know the rate until closer to July (it will start over - if you keep paying)

BUT ..... you certainly won't get 10%. So ...... make the 13th payment as, with the anniversary date late in July, you will be getting 10% (or 12%?) for most of the month.

If you do decide to continue into a 2nd year ... 1st payment is 1st August .... and you're then into a straight forward 12 payments for the second year. But maximise the payments in this first year ..... 10% is not to be sneezed at.

I think my last post has just contradicted what you've written if I've understood the bit in bold.

For a continuing RS,whilst I agree that 10% is a great rate, despite the lower rate in the second year, putting the 13th payment after the anniversary date compensates for this fact since it's allowing an extra payment for nearly a whole year.

rb10

sloughflint wrote: »

For a continuing RS,whilst I agree that 10% is a great rate, despite the lower rate in the second year, putting the 13th payment after the anniversary date compensates for this fact since it's allowing an extra payment for nearly a whole year.

Yes, if you put in the 13th payment on 1st July, whilst for the first year this will boost the interest slightly, the small length of time it's in there for means that there is little benefit.

If rates are still at 4% in the summer, you'd be around £8 better off (£6 after basic rate tax) by letting the June payment go through, then changing the standing order to make the next one be 18th July, and then changing it back to 1st of the month in time for August.

sloughflint

rb10 wrote: »

If rates are still at 4% in the summer, you'd be around £8 better off (£6 after basic rate tax) by letting the June payment go through, then changing the standing order to make the next one be 18th July, and then changing it back to 1st of the month in time for August.

I made it £17.81 better off ( see link) yet when I calculate I get £8 ( [strike]365*0.04-17*0.1)*250/365[/strike] :mad:
(365*0.04-16*0.1)*500/365

May have to remove link while I think about it.
Mind has gone blank. I'm pretty sure the £17 odd is correct but can't see the flaw in the calculation.