Interest rates

seikothrill

Can anyone give me guidance?

I have been paying £100 per month (the maximum allowed) into the Halifax Child Regular Saver for my daughter. I have paid the full annual amount of £1200 this year with each payment being sent on the 3rd of the month to ensure she qualifies for interest rate of 6%.

I have received the interest statement that shows she has earned £12.37 interest.

My question

Would she receive a higher interest rate return if I made a lump sum payment today using an account (say) paying 4% or would she earn more by me paying the £100 per month at 6%?

I hope the above is clear.

pressuredrop_2

The calculator shows £38.65 interest. £12? Not a full year.

4% £48

Baldur

seikothrill wrote: »

I have received the interest statement that shows she has earned £12.37 interest.

You don't mention what period the interest payment covers. For a full year, as a non-taxpayer, the interest should amount to approx. £38.65.

Would she receive a higher interest rate return if I made a lump sum payment today using an account (say) paying 4% or would she earn more by me paying the £100 per month at 6%?

A £1200 lump sum @ 4% AER would earn around £48.00 in interest over a full year.

HappyMJ

She should have got more than £12.37 did you miss a month?

£100 * 0.06 * 12/12 = £6
£100 * 0.06 * 11/12 = £5.50
£100 * 0.06 * 10/12 = £5
£100 * 0.06 * 9/12 = £4.50
£100 * 0.06 * 8/12 = £4
£100 * 0.06 * 7/12 = £3.50
£100 * 0.06 * 6/12 = £3
£100 * 0.06 * 5/12 = £2.50
£100 * 0.06 * 4/12 = £2
£100 * 0.06 * 3/12 = £1.50
£100 * 0.06 * 2/12 = £1
£100 * 0.06 * 1/12 = £0.50

Add all them up and you should get £39 less tax which should make £31.20. She would earn more interest at 4% on a lump sum deposit of £1200. Most people would have 2 accounts and invest £1200 at 4% and drip feed £100 per month into the 6% regular saver to get the best out of both.

seikothrill

Many thanks to all those who have taken the time to reply - I thought the interest payment was low.

Baldur - the regular saver commenced 20 May 2010 for a period of one year.

I have found the original application paperwork and I have met the criteria so I will be contacting Halifax for an explanation

Vortigern

seikothrill wrote: »

the regular saver commenced 20 May 2010 for a period of one year.

On what date was the interest added to the account?

seikothrill

Greatly appreciate peoples assistance.

I have found all paperwork and my original comments were from memory

Applied for a Childrens Regular Saving Account paying 6%.

Commencement date from statememt - 10 May 2010
No missed payments - £100 per month paid. Total paid in £1200 (maximum allowed)
Interest added 10 May 2011 totals £13.25

It would appear from peoples calculations the interest earned is not correct

rickey45

its depend on your deal if deal is 6% then u will charge 6% other wise u can get 7 or 8 % interest.


Leather Beanbags

Vortigern

From Halifax T&Cs: After 12 months, your Children's Regular Saver Account, including the balance and interest, will mature into an easy access savings account on anniversary of our receipt of your opening deposit for your Children's Regular Saver Account.

Did you allow the Regular Saver to mature into an easy access account as above? Or did you go to a branch and close it on the anniversary?

Either way, you should take it up with the Halifax as you appear to have met the terms and conditions and have not received 6% interest.

seikothrill

Vortigern wrote: »

Did you allow the Regular Saver to mature into an easy access account as above? Or did you go to a branch and close it on the anniversary?

Either way, you should take it up with the Halifax as you appear to have met the terms and conditions and have not received 6% interest.

The Regular Saver has matured and funds have been transferred to the easy access account that was set up at time of Regular Saver application.

I will be contacting Halifax this weekend.

Thanks for all responses

seikothrill

seikothrill wrote: »

The Regular Saver has matured and funds have been transferred to the easy access account that was set up at time of Regular Saver application.

I will be contacting Halifax this weekend.

Thanks for all responses

Just a quick note of thanks for all the people who replied.

I made a written complaint to Halifax and today received a phone call with an apology. My daughters account should have been credited with £39.50 interest and not the £12.37 received. Also Halifax has thrown in an additional £25 for the inconvenience.

The £25 is an added bonus as I wasn't really looking for this - I just wanted the correct interest to be credited and also to make other people aware to check their Childrens Regular Saver interest

I must also say I was very impressed with the speed Halifax responded to my complaint letter and the professional and courteous manner of the phone call