Regular Savings Accounts

Galstonian

I would suggest that the Halifax account is okay if you are not a tax payer but the vast majority able to invest £250/month are tax payers.

If this was available to be held in trust for children it would make a decent account but the fact that funds are rolled out to another account on the anniversary limit its use more limited than some of the building society regular savers.

I was told that a children's version may become available but have no facts about it.

archimedes_2

Hi,

Browsing through this page, I saw a question about regular savings using a lump sum, say of £2000 and feeding 2 accounts with £250 per month.

The reply was:

"Account 1: ING Direct 4.3%
Account 2: Leeds & Holbeck regular saver

You have £2000 to invest

You put £250 in Account 2 and the remainder in account 1

Every month you transfer £250 (max allowable) from account 1 into account 2. The only thing to be careful of is that you must ensure is that once you've nearly spent up the initial lump sum - you keep enough back to make the minimum monthly payments.

Does this make sense

martin"

Not to me it doesn't! ??? I did some calculations (perhaps wrongly, ::)I'm prepared to admit!) looking at the Future Value of the investments in each account and found that the total interest was exactly twice what it would have been had the £500 been fed into a single account.

Am I wrong? If so, how should a calculation like this be done (say in Excel) to show that this is a more profitable way of investing?

I used FV (rate,nper,pmt,pv,type) based on 4.3% (as in above example)

FV ((1+0.043)^(1/12)-1),12,-250,0,1)

Please correct my maths or logic! :-/

System

Went into the local Derbyshire branch yesterday.

They have a special offer on 'till 30 April which means you can have two regular savings accounts.

That means a minimum regular payment of £20 per month and a maximun of £2,000.

The details are in a leaflet, but I can't find them on the web site

ED

5.20% gross on up to £24,000 in a year trickling monthly into 2 Derbyshire BS regular-saver a/c's could certainly raise useful interest income.

The a/c is included on the Society's website here :

http://www.thederbyshire.co.uk/savi/easyacc/easyacc_keyfeat_regsav.html

Perhaps Derbyshire doesn't mention the offer, there, for 2 such a/c's being possible per customer simply because their staff are very busy currently. Last month I applied for 1, then a 2nd, & both times there was almost a week's delay bedore they were opened. Manchester Jack, bet you're lucky enough to walk in & open straight away. :-)

archimedes, sorry my brain is too tired to help you. Anyone else...?

Galstonian

Oh, and you can get the money from DBS without penalty by closing your account instead of withdrawing. Don't know how often you could pull this one off but it does say:

You will qualify for the bonus rate on closure if you:

• Have missed no more than one monthly payment in the account year
• Haven't made any previous withdrawals in the account year

ED

Galstonian, you're so right! :-) Derbyshire BS's Regular Savings a/c terms don't currently include competitor's usual spiel of a requirement for "12 equal monthly payments", or the like.

In fact my info-pack states :

"You can vary the amounts of your monthly payments but they must be at least £10 and not more than £1000."

Many contemporary a/c's set the amount with the 1st payment, allowing a change only on each anniversary of a/c opening. Example (for newcomers) : open an a/c with £10, pay £10 every month for a year, then you can swap it to £20 - or £100, or whatever can be afforded up to £1,000 - each month for the next year.

Skipton BS, like Derbyshire BS, allow the amount to be varied month-by-month. Useful as interest rates can become less competitive. Then they'd get only the minimum from my house-sale proceeds!

Manchester Jack is lucky being able to visit a Derbyshire BS branch, because the Society allows over-the-counter monthly deposits into the Regular Savings a/c. Most of us have to tolerate using Standing Orders, sometimes earning nil interest for 4-day periods. :-( (£'s leave bank a/c on a Thursday, arrive in Derbyshire a/c on Monday, earning nil interest Thurs+Fri+Sat+Sun.)

ED

Anyone here got a Yorkshire Building Society 'eSaver' a/c?

I'm considering having one (4.35% gross), but £1,000 min. balance has to be maintained, & outward BACS transfers take "up to 5 banking days". (So, nil interest for a week or more - grrr!)

My main purpose would be monthly feeding of my Yorkshire 'Monthly Saver' a/c (4.90% gross). Anyone know if this is done instantly, via Internal Transfer. Yorkshire's head office have proposed setting up a Standing Order between the 2 Yorkshire a/c's. But if that means several days without interest, no thanks! :-( I'd rather feed it direct from a Coventry BS a/c.

ED

5.05% gross can be earned for balances of £10,000+ in Norwich & Peterborough Building Society's monthly-payments a/c titled 'Super Saver II'.

Whilst building up to that balance (via £20 - £500 per month) 4.65% is paid for £5,000+ balance
4.40% for £1,000 balance
4.15% for £20+

I've just started an a/c, so it takes a few days to feed £500 in for April, & £500 in for May - then the £1,000 balance earns 4.40%. :-) Only 8 more months till the balance earns 4.65%. After 20 months in total it will earn 5.05% (or whatever variable rate then exists).

Very pleased with good news just in from Norwich & Peterborough BS, for those of us with a N+P 'NmG Saver' a/c (earning 4.30% gross for £1+) who loathe earning nil interest for 2 - 5 days each month whilst a Standing Order feeds a regular, monthly a/c via an external bank or BS a/c :

"the Super Saver account can be transferred into [online, by the customer] on a monthly basis."

It is not essential to set up a Standing Order from 'NmG Saver' to 'Super Saver II', so funds are transferred immediately and earn interest for every single day. The customer also has the freedom to decide which day of any given month to add £20 or more to the monthly a/c.

"The restrictions that were in place for transferring between accounts, particularly Bonds and the Super Saver have been lifted."

This news from Norwich & Peterborough makes the society's regular, monthly savings a/c the best payer (for a reasonable sum of money, that can continue from year to year) second only to Derbyshire BS (5.20%) and - for small sums - Halifax (6%, but unable to hold in a/c beyond 1st anniversary).

Coupled with Norwich & Peterborough having a cheque a/c ('NetMaster Gold') which is OK for BACS transfers to & from ING Direct, this monthly savings a/c seems an attractive prospect for the Savings Fountain advocated by Martin Lewis.

If only Yorkshire BS (+ many others) would take a leaf out of Norwich & Peterborough's innovative 'book'. ;-)

direct link to the N+P monthly a/c :

http://www.norwichandpeterborough.co.uk/savings_current/ad_super_saver2.htm

System

Be gentle it's my first time.
Anybody try Derbyshire Building Society for a Regular Savings Account?
How about Yorkshire Building Society for Cash ISA's.

Kazza242

Hi Tom,

I open two Derbyshire Regular Savings accounts last week (offer for two accounts ended on 30th April).

I've set up a standing order so that money is moved from my current account to the regular savers each month as I get paid.  

I think it's a top account.  The interest rate is not as high as that of Halifax, but it has better terms e.g. between £10-£1000 per month compared to Halifax's £25-£250.  The Derbyshire also allow one withdrawal per account year and one missed payment, whereas Halifax do not allow any withdrawals to be made during their account year and I believe you aren't allowed to miss a payment.

The Derbyshire account has no fixed term which enables you to earn interest on your money for longer. The Halifax account only lasts one year before it's swept into a lower interest account and so you don't really benefit as much.  Halifax's interest rate is fixed for one year so you can't take advantage of any interest rate rises, whereas the Derbyshire interest rate is variable.

Regarding the Yorkshire Building Society cash mini ISA, I think you could get better rates elsewhere.  Their E-ISA offers 4.35% AER, but you could get 4.5% with M&S (and a guarantee to remain 0.5% above base rate until 5th April 2005).  Intelligent Finance (IF) and the Abbey (postal cash mini ISA) are offering 4.6%.  IF guarantee to remain 0.3% above base rate until January 2005 and Abbey 0.5% until 1st April 2005.  

With Bank of England Base rate rises expected this year (and likely this month) it is definitely worth opting for a cash mini ISA that comes with a rate guarantee.