Regular Savings

Carpi10

Hello all,

As by the title, i was looking at getting another regular saver as i believe i could get more interest than from my normal saver. Do you have to hold a current account to be able to apply for the regular saver?

I was also looking at the Santander First Home Saver, same question really, do i have to hold a current account with them.

FYI, I hold my accounts with Halifax.

Thank you.

DragonQ

Best one by far is First Direct. You get 8% gross but you do need a current account with them that usually costs £10 a month. However, you can avoid the monthly charge by opening a normal savings account with them and putting £1 in it.

Carpi10

DragonQ wrote: »

Best one by far is First Direct. You get 8% gross but you do need a current account with them that usually costs £10 a month. However, you can avoid the monthly charge by opening a normal savings account with them and putting £1 in it.

I have applied for a FD Account but was unsuccessful, don't get me started with that... :eek:

Jake'sGran

DragonQ wrote: »

Best one by far is First Direct. You get 8% gross but you do need a current account with them that usually costs £10 a month. However, you can avoid the monthly charge by opening a normal savings account with them and putting £1 in it.

I have never been attracted to regular savers as the amount you get at the end of the year is a lot less than the headline rate e.g. using the First Direct as an example, the first months payment is the only one that gets 8% and the final months payment will get only 1/12th of the full year's interest on the total sum. It's a mystery to me why anyone would accept this and pay the bank £10 each month although I can see there is a way round this using the savings a/c with one £1 payment.

DragonQ

If you deposit the full £300 per month at 8% (£3600), you'll get a return of 4.4% on the total investment at the end of the year. That's much higher than any 1 year fixed rate savings account, PLUS the money that isn't in the account yet is earning interest elsewhere!

For example, if you had £3600 in a 3% savings account and moved £300 each month into the First Direct regular saver at 8%, at the end of the year you'd have ~£3810 - a return of over 5.8%!

MoneySaverLog

Jake'sGran wrote: »

I have never been attracted to regular savers as the amount you get at the end of the year is a lot less than the headline rate e.g. using the First Direct as an example, the first months payment is the only one that gets 8% and the final months payment will get only 1/12th of the full year's interest on the total sum. It's a mystery to me why anyone would accept this and pay the bank £10 each month although I can see there is a way round this using the savings a/c with one £1 payment.

They all operate the same way, at the end of 12 months you build up a pot of money which you just bung into an account which pays the highest rate at the time and set up a standing order to drip feed it back into the next regular saver.

Because of the high rate they have to restrict what you can save a month and do not allow large one off deposits at the start so have to drip feed it every month.

My plan would be for it all to become self funding. Good idea or not, or whether there would be a better option for my pot at the end I'm not sure.

Biggles

Jake'sGran wrote: »

I have never been attracted to regular savers as the amount you get at the end of the year is a lot less than the headline rate

No, the amount at the end of the year is exactly the headline rate, which is quoted on an APR basis, ie it's related to the length of time the money has been there.

If you have a lump sum to invest, obviously it's not the right account for you, that's not what they are for.

rb10

Carpi10 wrote: »

I was also looking at the Santander First Home Saver, same question really, do i have to hold a current account with them.

Whilst the Santander First Home Saver is a great account, I believe it's no longer available to new customers.