Hallifax Regular Saver.

nagpalanuj

Hi,

I wanted to open this Child Regular Saver at hallifax at 10% intrest

What I thought

Every month I put 100 following will work

1. 100
2. 100 + 100 (Next Installment) + 10 (Intrest on first month)
3. 100 + 100 +100 + 10 + 21 (Intrest on balance at end of moth two)
4. 100 X 4 + 10 + 21 + 33.1 (Intrest on month three end balance)

and so on.....

But intreset is calculate at the end of Year
so
Month 1. 100 will get 10% that 10.
Month 2. 100 will get 9.36% as this stays in account for 11 months only)
and so on
finally you'll get 64.5 approx.

If I keep it only on save4it account of Hallifax at 5.3%
it comes out to be 63.6 GBP

How regular saving os better that just one save for it benifit of only one pound and I loose access to my money for one year.

Please advice If I am wrong

nagpalanuj

I have got this info from a Hallifax advisor over phone (Regarding intrest being calculated at end of year)
I am looking to save for my son and daughter. I need to start now to put some serious money for both of them to have decent choices before they decide on a carier

Mikeyorks

The interest is calculated daily (but only added annually) .... but only on the amounts you have actually put into the Regular Saver e.g that for the final month only attracts 10% for that month .. not the whole year. You're comparing that with money sat for the whole year in the Save4it account - so youre comparing apples and pears.

Plenty of other threads have explained this in detail - do a Search (top of thread) on the Savings & Investments forum .... but first read this :-

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1108401263,93536,

klb_3

I have the regular savings accounts for my children as well as save4it for birthday money etc.
The regular savings pays interest of 10%aer, the sve4it pays 5.3%, so basically you will get twice as much interest in the regular account.
Your first calculation was correct, but you need to do the same for the save4it account, ie month1 £xx, month2 £xx etc., and you will get the achieved interest rate.

nagpalanuj

So if Hallifax people say their Save4It account give 5.3% intrest is it calculated every motnh or every year.

Regards,
Anuj

Mikeyorks

Every day - but only added annually(?). But as the previous post - it's only 5.3% compared to the Reg Saver 10% .... so the latter is the better payer, albeit you can only drip feed money into it. But the money is earning interest elsewhere whilst it's waiting to be fed into the Reg saver?

Read the link I provided !! In particular the section entitled 'They really do pay this amount'

moonrakerz

In reply to the OP.

If you are saving £100 a month out of your pay, it gains interest as you say.
If you have £1200 to put in a Regular Saver, you put that in the 5.3% interest account and pay £100 a month from that to the Regular Saver.

You then have two lots of interest:
1. On the increasing sum in the Regular Saver.
2. On the decreasing sum in the 5.3% account.

Done that myself for the last several years.