Are regular savings accounts that good???

carpy

as these accounts tend to pay the highest rates of interest should you open as many as possible and drip feed them from current and normal savings accounts?

i've had a halifax one for a couple of years now @7%

this year i've also opened a A&L one @8%

and more recently a lloydstsb @8%

would i gain more interest by feeding these regular savers from my savings account???

for example;

if i pay in £250 a month for a year = £3000

how much interest will i accumulate?

if i leave the £3000 in my savings

interest @5.15% = £154.50 gross

which works out greater??

capehorn

The point is if you load your regular savings accounts with as much money as you can get in them, you will be earning 7 or 8% on that money, while you are still earning 5.15% on the money that you have in your normal savings account. Do it that way and you will always end up getting more interest.

masonic

carpy wrote:

if i pay in £250 a month for a year = £3000

how much interest will i accumulate?

You would earn roughly £75 on the money sitting in your 5.15% account waiting to go into the regular saver and roughly £120 on the money within the regular saver (based on the assumption that, on average, the money will spend 6 months in each account). That gives you a total of about £195 (compared with £154.50 if it were just kept in your savings account).

carpy

capehorn wrote:

The point is if you load your regular savings accounts with as much money as you can get in them, you will be earning 7 or 8% on that money, while you are still earning 5.15% on the money that you have in your normal savings account. Do it that way and you will always end up getting more interest.

so if a regular saver pays a higher rate of interest than the best normal savings account (say icici @5.15%) then it's always better to shift as much as you can into it.

so to maximise my interest i should open as many regular saver accounts i can find with a interest rate of greater than 5.15%?!?

masonic

carpy wrote:

so if a regular saver pays a higher rate of interest than the best normal savings account (say icici @5.15%) then it's always better to shift as much as you can into it.

so to maximise my interest i should open as many regular saver accounts i can find with a interest rate of greater than 5.15%?!?

That's exactly right. You do of course have to have sufficient funds to cover the minimum monthly payments into those regular savers, though. Also, you need to be aware of any penalties for withdrawals from these accounts if you might need some of the money before the 12 months is up.

carpy

masonic wrote:

That's exactly right. You do of course have to have sufficient funds to cover the minimum monthly payments into those regular savers, though. Also, you need to be aware of any penalties for withdrawals from these accounts if you might need some of the money before the 12 months is up.

i certainly couldn't afford the maximum monthly payments on all of them from my salary but will just be using my savings. better to be getting 7/8% than 5.15%.

right i'm going to open as many regular savers i can with interest rates of above 5.15%.

any ideas how many there are?

ReportInvestor

Are regular savings accounts that good?

The current batch are amazing & unprecedented. Open as many as you can .

masonic

carpy wrote:

any ideas how many there are?

I did quick search for regular savers at Moneysupermarket and came up with about 10. A few of these require you to open a current account e.g. Barclays 10% and HSBC 8% (which also require a salary commitment) and A&L 10%. Still, there should be enough to allow you to turn-over a lot of savings.

Edit: Since some of the accounts with lower rates are creeping quite close to the 5.15% you are earning in your savings account, I really should mention that if you are making transfers into a regular saver, you may well lose a few days interest during the transfer when the money is in transit. This is normally insignificant compared to what you gain, but if you need to make a transfer from your savings account to a current account, then on into the regular saver, you could lose up to 10 days interest, which is equivalent to about £4 on £3000 of funds. In that extreme case, you would need a difference in rate of just under 0.3% to recoup that loss, so I would avoid those 2-3 accounts paying rates of 5.25% and thereabouts.

rkuk

carpy wrote:

i certainly couldn't afford the maximum monthly payments on all of them from my salary but will just be using my savings. better to be getting 7/8% than 5.15%.

right i'm going to open as many regular savers i can with interest rates of above 5.15%.

any ideas how many there are?

...would it not be better to put more money into fewer accounts (or the best ones) as you make the interest on the money invested (unless I'm wrong here - so I stand to be corrected)

i.e. if you opened say, 2 regular savers and put as much as you could afford into them, rather than say for example 5 with smaller chunks.

also, as pointed out it will be less bundles of money in transit losing potential interest.

I am looking at opening two accounts and shifyting as much as I can afford into them each month. Just trying to work out the logistics, of what goes where. It gets bloody complex!

masonic

rkuk wrote:

...would it not be better to put more money into fewer accounts (or the best ones) as you make the interest on the money invested (unless I'm wrong here - so I stand to be corrected)

It's not quite as simple as that. If you are looking to pile savings into regular savers, there is an advantage in getting the money in as quickly as possible so that you are benefiting from a higher rate on all of your savings sooner (then dropping the monthly funding on the lower paying accounts and focussing on the higher paying ones). There are some instances where you would be right, but it really depends on several factors. It's an issue that's best dealt with using specific examples.

rkuk wrote:

also, as pointed out it will be less bundles of money in transit losing potential interest.

Actually that doesn't matter. Moving £3000 in one chunk loses you the same amount of interest as moving it in 20 installments etc. But it is less work setting up and keeping track of fewer payments.

rkuk

masonic wrote:

It's not quite as simple as that. If you are looking to pile savings into regular savers, there is an advantage in getting the money in as quickly as possible so that you are benefiting from a higher rate on all of your savings sooner (then dropping the monthly funding on the lower paying accounts and focussing on the higher paying ones). There are some instances where you would be right, but it really depends on several factors. It's an issue that's best dealt with using specific examples.

Oh of course! yes!!!. I see mate - you are right. perhaps a better way for me to look at it is: getting as much money out of the standard saver as quickly as possible - that way it would all be working harder!

Actually that doesn't matter. Moving £3000 in one chunk loses you the same amount of interest as moving it in 20 installments etc. But it is less work setting up and keeping track of fewer payments.

yeah! and now I have came to your way of thinking it may cause a pain in the bum for me - as I'm going to have to look into setting up more accounts! grrr :mad: This whole method of saving money is new to me and there is so much to try and take in, I get easily confused. :beer: