The Savings Fountain Discussion Area

Ebenezer_Screwj

Martin, I have the Savings Fountain in place and have three points for discussion.
1) You say that when a regular savings account is "full", another one may be opened elsewhere. Surely, if funds permit (from a lump sum drip-feed, say) two RS a/c's could be opened to run in tandem to the maximum.
2) Your advice to "drip-feed a regular savings a/c with a standing order from a normal savings a/c" would not work (not with ING Direct anyway) because savings a/c's do not support standing orders. A manual transfer would be needed and care taken to remember to do it each month.
3) ING Direct pays high rate interest, currently 4.50 % pa gross, but PAID MONTHLY. I will be interested to see what the interest netts out to after basic rate tax, because institutions usually offer a lower rate of interest when it is paid monthly. Maybe ING calculate theirs on a different basis.

Galstonian

With ING you can setup transfers in advance so you can set up a "pseudo standing order".

I have to admit the theory is exactly the same as the "leaky bucket" principle.  Pour your savings into the bucket at the top, holes drip feed ones that can't take lump sums and poorer rate accounts catch any "overflows".  Needs a picture really I suppose.

ING is paid monthly but calculated daily.

ED

<< With ING you can setup transfers in advance so you can set up a "pseudo standing order". >>

Galstonian, this is excellent news! Anyone here know of any bank or building society that doesn't accept monthly payments for 'regular saver' accounts done in this way?

Fastflys

Hi Ebenezer_Screwj

ING gross interest rate paid monthly is 4.41% [3.528% net if standard rate tax payer]

System

Dear Sir

I am a new member of the 'MSE' family, but becoming adicted fast.

OK, I've got the £3k in the ISA (Marks & Sparks).

The bulk of my 'fortune' is stored in ING @ 4.5%

I need the intermediate 'Regular' bit in place, I go for Halifax @ 6.05% (let's be greedy).

The trick is moving the funds from ING to 'Halibut' simply and at the right time to maximise the profit, my understanding is a second Halifax is required, yes?

Hence, ING - Halifax - Regular.

Now there is a transfer delay ING to Halifax, say three days, where is my money in that period, I assume I'm getting interest from someone. I suspect ING pay until received by Halifax, again the transfer from Halifax to Regular should be dynamic with no delay.

But before you start the process, you must throw a double six.

Regards

ED

Welcome, not-so-Gullible Pauper!

Interesting point you raise - concerns me, too...

Halifax require the 'Regular Saver' a/c to be opened alongside a 'Web Saver' or other suitable Halifax a/c (to receive the £'s one year hence). So, for the reasons you state, I'm experimenting by making my April deposit to Halifax 'Regular Saver' via Standing Order from Halifax 'Web Saver' a/c.

Any MSE already doing this for Halifax's other regular, monthly a/c? If so, is a SO necessary, or could we instead just do a manual online "internal transfer" any day in each month?

I'm told my 'Regular Saver' will be credited same-day, instead of nil interest for 2 banking days, as happens when a SO leaves a non-Halifax a/c (eg on a Thursday) before reaching the Halifax 'RS' a/c (eg on a Monday) - 4 days with nil interest, bah, humbug!

robnye

any delay in the posting of money into an account sent from another bank/bs is in the hands of the sending bank....... and not the receiving.

I regularly transfer money from one account (bank) to savings, the only one that doesnt penalise me in any way is the bank to savings transfer where both accounts are with the same bank (ie A&L)

this is how most uk banks/bs use our money in this way for their own intentions......!  >:(

System

Thank you for your welcome Mister Ed

Exploring the situation a little deeper, please correct me if I'm wrong. (I'm sure someone will be only too pleased to do so)

OK, I play the game £3k into Halibut on the drip, which means per annum I have an average of £1.5k in ING & £1.5k in the Halifax.

This draws interest at:

Halifax £1.5k @ 6.05% = £90.75
ING £1.5k @ 4.50% = £67.50

Total = £158.25

Leaving it in ING (no hastle).

ING £3.0k @ 4.5% = £135.00

I therefore increase my interest by £23.25

Bearing in mind the lost days of interest shifting it about the system (it's in limbo).

Reduces the saving again, knock the £3.25 off.

Profit, say £20.00

Less tax, leaves say £16 profit

However, let's not forget the other expenses, petrol, stamps, 'your time', whatever.

Also, remember miss a payment, etc

Is it worth it.

Please tell me where my calculations are faulty, it seems the benefits are 'buttons' for all the work.

Galstonian

If you are going to use a regular saver account it is much more beneficial if you can leave the money after it has built up - unlike the HFX which forces your money out after 1 year. Look at Martin's recs for accounts, the rates are around 5% rather than 6 but after more than a year it makes sense.

ED

For eg, Derbyshire BS pays 5.20% gross for their regular, monthly a/c (£10 – £1,000 per month).

Yorkshire BS's Monthly Saver a/c = 4.90% (£10 - £100/month).

Leeds & Holbeck's Regular Saver a/c = 4.80% (up to £500/month).

I don't recommend Britannia BS. Their Regular Saver a/c has paid only 4.15% since December, rising just 0.10% on April 1, whereas last yr it was a market leader @ 4.85%. Any MSE ever complained to Britannia (I'm preparing…)

If a lump sum can be tied-up with 3-months withdrawal notice, Nottingham BS's Post It a/c pays 4.90% (incl 0.90% bonus) – min £1,000 deposit, additions can be via BACS.