Lloyds TSB regular saver.

Biggles

What about if i did the following:
Keep £6000 in Lloyds online saver. 1st of every month, transfer £250 into Llloyds current account... and then £250 from Lloydscurrent account into Lloyds regular saver.
Am i allowed to do this? will it work?

No problem with that at all, you're keeping your money in their accounts, which is what they want, after all.

[Deleted User]

BSingh wrote:

What about if i did the following:
Keep £6000 in Lloyds online saver. 1st of every month, transfer £250 into Llloyds current account... and then £250 from Lloydscurrent account into Lloyds regular saver.
Am i allowed to do this? will it work?

1) Yes, but transfer to the RS is only allowed by standing order.
2) The interest rate on the Online Saver is not great - 4.40% gross including an introductory bonus IIRC.

rangers_fc

A quick recap just to ensure I fully understand the workings of this account.

I am free to change my standing order paid into this account, to another provider rather than the TSB if I wish.
I do not need to have a active current account with TSB to keep my regular saver qualifying for the 8% rate

tom188

rangers_fc wrote:

A quick recap just to ensure I fully understand the workings of this account.

I am free to change my standing order paid into this account, to another provider rather than the TSB if I wish.
I do not need to have a active current account with TSB to keep my regular saver qualifying for the 8% rate

1. Yes
2. You need a current account with LTSB but dont need to do anything with it.

BSingh

Yes Deleted_User... the online saver rate isnt that great...
But what I am trying to compare against is the following:
e.g.
Transfer £250 from another savings account (e.g. IceSave, HiSave, etc) via standing order. This will take 3 working days. So you will lose 3 days interest per month.,,, maybe more when you consider that sometimes the 1st, 2nd or 3rd of the month falls on a weekend (so if you transfer money on the 1st Friday... it wont get there until the 5th of the month which is the Tuesday as the 2nd and 3rd are saturdays and sundays!)

or....

like i said before...just use the lloyds online saver?

RobLondon1984

I also came across the monthly saver at Lloyds TSB at 8%. If you put the maximum amount at the start, £500, and put the maximum every month, £250. This would give a total of £3500 for the 1st year, and £3000 for the 2nd year? Is the interest a year less then the interest of a ISA at say 5.25%?

Which would be better? I think the account close after 2 years?

tom188

You have not specified if you would be regular saving into the isa or putting in a lump sum. Therefore I will calculate as a regular saver.

Note you have not compared like with like as you have only paid 3000 into the ISA

With RS
Balance at End of Term 6,799.83 Gross 6,687.96 Net
Total Interest earned over term of investment 549.83 Gross 437.96 Net

With ISA
Balance at End of Term 6,331.24
Total Interest earned over term of investment 331.24

So more with the RS.

RobLondon1984

tom188 wrote:

You have not specified if you would be regular saving into the isa or putting in a lump sum. Therefore I will calculate as a regular saver.

Note you have not compared like with like as you have only paid 3000 into the ISA

With RS
Balance at End of Term 6,799.83 Gross 6,687.96 Net
Total Interest earned over term of investment 549.83 Gross 437.96 Net

With ISA
Balance at End of Term 6,331.24
Total Interest earned over term of investment 331.24

So more with the RS.

Thanks for your reply, I am new to this sort of things, so I don't understand you. I will do more reseach, you said regular saving with ISA or putting in a lump sum. I though you can only put 3k a year in a ISA, so not sure what you mean by regular savings in a ISA. I wanted to compared the interest of the Lloyds 8% interest and ISA 5.25% interest, both putting in the maximum amount.

tom188

You can put in 3000 per year in an ISA.
However this can be £3000 in one lump sum, straight away, or at any time in the tax year.
Or £250 per month for a year.
Or about £57.70 per week.
Or any other combination of payments that total a maximum of £3000 per year.

In the regular saver you can put in £250 per month plus a £500 opening deposit.

To compare like with like you should compare the difference of saving £250 per month into the ISA with £250 per month into the regular saver.

After 2 years the regular saver will give you 508.29 gross if you are a non tax payer. 404.98 if you are a basic tax payer or 304.97 if you are higher rate.

The ISA will give you 331.24 tax free, so depending on your tax status you may be better or worse off with the regular saver.

Had you deposited 3000 on the 6 April in two consecutive years you could earn 471.21 tax free in two years.

The interest is based on how long the money is in the account for, therefore it is difficult to absolutely compare like with like.

RobLondon1984

tom188 wrote:

You can put in 3000 per year in an ISA.
However this can be £3000 in one lump sum, straight away, or at any time in the tax year.
Or £250 per month for a year.
Or about £57.70 per week.
Or any other combination of payments that total a maximum of £3000 per year.

In the regular saver you can put in £250 per month plus a £500 opening deposit.

To compare like with like you should compare the difference of saving £250 per month into the ISA with £250 per month into the regular saver.

After 2 years the regular saver will give you 508.29 gross if you are a non tax payer. 404.98 if you are a basic tax payer or 304.97 if you are higher rate.

The ISA will give you 331.24 tax free, so depending on your tax status you may be better or worse off with the regular saver.

Had you deposited 3000 on the 6 April in two consecutive years you could earn 471.21 tax free in two years.

The interest is based on how long the money is in the account for, therefore it is difficult to absolutely compare like with like.

That explains everything, one final question, how do work out tax deduction on interest and what rate is the basic and higher tax rate? The tax rate changes, so £2150 above £5035 get tax at 10%, and 22% from £2150 to £33300. Say I get tax 5.2k a year, how do you work out the deduction on interest? As you could get tax at both 10% and 22% band, maybe 40% as well if your earning alot.

Thanks