Norwich and Peterborough E-Family Regular Saver Account

dggar

What is the opinion of forum members about this account?

It claims to pay 5%(paid yearly) before tax for the 1st year for savers with a child in full time education and requires your to put in up to £250 per month. you don't appear to be able to put a lump sum in to start.

from my calculation it would appear to pay £81 interest on £3000 which is about 2.71%

Baldur

Suggest that you read the regular savings article on the main site, as your understanding of regular savings accounts appears to be flawed, in that you seem to expect an institution to pay interest on money that has not yet been deposited - see http://www.moneysavingexpert.com/savings/best-regular-savings-accounts - particularly the drip-feeding section http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#dripfeed

Loughton_Monkey

dggar wrote: »

What is the opinion of forum members about this account?

It claims to pay 5%(paid yearly) before tax for the 1st year for savers with a child in full time education and requires your to put in up to £250 per month. you don't appear to be able to put a lump sum in to start.

from my calculation it would appear to pay £81 interest on £3000 which is about 2.71%

Yes. It delivers exactly what it says on the tin.

I have a similar "Regular Saver" with First Direct - also at 5%. But I don't have to have children - which is good because I don't have any anyway.

You can't expect (currently) any bank to offer you 5% a year on a lump sum. 3% or slightly more is the best you'll get.

Regular Savers are a sprat to catch a mackeral. Banks are hoping that (a) having one keeps you at that bank for at least the year, and (b) you might fail to notice the 0.5% interest you get after the year, and just leave it there, or (c) if you DO notice, then, OK, maybe you will be happy to move it to a more 'ordinary' savings costing them only 2% or something.

dggar

Baldur wrote: »

Suggest that you read the regular savings article on the main site, as your understanding of regular savings accounts appears to be flawed, in that you seem to expect an institution to pay interest on money that has not yet been deposited -

I think I'm aware of how regular savings accounts function.
That is how I was able to work out the interest paid wouls be about £81.

I feel the best way to use such accounts is to initially put in the maximum allowed and top up with the minimum required.

The main point of my posting was whether this particular account was any better or worse that anything else out there

rb10

No - the best way of using Regular Savings accounts is to put in as much as you possibly can every month.

This account pays 5%, so it's significantly higher than any 'normal' savings account at the moment.

Your understanding of these accounts does seem to be flawed - you calculated a rate of 2.71% based on the final balance of the account at the end of the year. But you have to remember that the money is only being added a bit at a time during the year.

In reality, you are getting 5% on every penny in your account while it is there. This is why the more you can put in, the more interest you will receive at the end of the year. But it will all be at 5%.

This account is better than pretty much every other savings account available.

Baldur

dggar wrote: »

I think I'm aware of how regular savings accounts function.
That is how I was able to work out the interest paid wouls be about £81.

I feel the best way to use such accounts is to initially put in the maximum allowed and top up with the minimum required.

The main point of my posting was whether this particular account was any better or worse that anything else out there

If you're a standard rate taxpayer, the interest that you'd receive, after tax, on the maximum £250 per month would be around £64.61 or around £80.64 as a non-taxpayer - see the Regular Savings Calculator.

Principality currently offers a RS account paying 4% but with a monthly maximum of £500, and their limited availability 150th Birthday RS branch account is said to pay 5% with a similar maximum of £500 per month.

As rb10 says, the maximum permissible per month will give the best return.