regular savings

bazhance

Hi Can anyone help I have just finished a regular saving scheme with the halifax which payed 7.07% on monthly payments of £250.The amount payed out seems low,is there a web site where I can check if their figures are correct.Many thanks

grumbler

Welcome.
Just read this THREAD a few lines below!

ED

bazhance - hopefully the thread grumbler mentioned will help you.

A couple of additional ideas...

Assuming the Halifax 'Regular Saver' you've just finished ran for a full 12 months, unfairly the rate was 6% fixed at the outset for the 12-month period. A member of my family suffered likewise. In contrast, newcomers opening the a/c from last October onwards were given a fixed rate of 7% gross.

Abbey played more fairly than Halifax by immediately granting their highest rate not only to newcomers but also to existing account holders. (Sadly, their Fixed Rate Monthly Saver has now been withdrawn for newcomers.)

Perhaps your 6% Halifax interest disappoints you for an additional reason. Whereas a lump sum deposited 1 year ago at a fixed rate would earn a pre-determined amount, a regular savings account starts with a small balance, and enlarges month-by-month.

Roughly speaking, if a Halifax RS account received the maximum allowed monthly deposit, the yearly average would be £1,500 (£250 p m X 6 months) = approximately £90 before tax is deducted (if applicable). It will probably be slightly higher due to interest earned on the interest.

If the regular saver is funded not from income but from existing savings, interest is also earned on the remaining part of those savings.

Hope this helps.

Walletwatch

ED wrote:

Assuming the Halifax 'Regular Saver' you've just finished ran for a full 12 months, unfairly the rate was 6% fixed at the outset for the 12-month period. A member of my family suffered likewise. In contrast, newcomers opening the a/c from last October onwards were given a fixed rate of 7% gross.

Abbey played more fairly than Halifax by immediately granting their highest rate not only to newcomers but also to existing account holders. (Sadly, their Fixed Rate Monthly Saver has now been withdrawn for newcomers.)

I don't see how the question of being 'fair' or 'unfair' comes up here. When you signed up to the Fixed Rate Regular saver, it was quoted to be a fixed rate scheme, where you'd deposit a fixed amount on a monthly basis for 12 months, and earn 6% on it. period. There's nothing fair or unfair in Halifax launching a new Regular Saver later on with a rate of 7%, in response to multiple increases in the Bank of England rate.

Abbey, on the other hand, probably did not have too many existing deposits, and hence, took a business decision to extend this higher interest rate to existing lower rate Regular Saver customers.

ED

True, Walletwatch, Halifax weren't completely unfair - but it did feel demotivating for people stuck for up to 5 or 6 further months at the old rate. But I agree rules are rules.

Paul_Varjak

bazhance wrote:

Hi Can anyone help I have just finished a regular saving scheme with the halifax which payed 7.07% on monthly payments of £250.The amount payed out seems low,is there a web site where I can check if their figures are correct.Many thanks

Let me guess, you have earned interest of around £100? If so, that is probably right! I may be a little more than this, depending on how long after you made 12th payment the account was closed.

Remember, that although you paid £3,000 into the account by the year end, you did not have £3,000 in the account all year!

I effectively funded my regular saver account from my websave account. I would not expect to earn interest on the same pot of money in two accounts at the same time!

grumbler

bazhance wrote:

...halifax which payed 7.07%

Are you sure about 7%? I do not remember when exactly Halifax increased fixed rate offer from 6% to 7%, but my regular saver matured 3 Mar and it had 6% fixed.
£(3000/2)*7%*0.8=£84
£(3000/2)*6%*0.8=£72

Milarky

Walletwatch wrote:

I don't see how the question of being 'fair' or 'unfair' comes up here. When you signed up to the Fixed Rate Regular saver, it was quoted to be a fixed rate scheme, where you'd deposit a fixed amount on a monthly basis for 12 months, and earn 6% on it. period. There's nothing fair or unfair in Halifax launching a new Regular Saver later on with a rate of 7%, in response to multiple increases in the Bank of England rate.

Abbey, on the other hand, probably did not have too many existing deposits, and hence, took a business decision to extend this higher interest rate to existing lower rate Regular Saver customers.

All 'fair' points to make. But the Halifax - more so than the Abbey account- is unusual in that it is only a 'regular saver' account for 1 year. It would be nice indeed if you could even transfer the proceeds of the account to an equivalent Halifax Monthly Saver - which pays pretty decent interest - on which to add subsequent monthly amounts but -alas- you cannot. Abbey at least will roll over you account into a 5% regular saver [Some people might prefer the cash out of course]

So these are different propostions.

As things stand, you can reapply for a HRS 'mark 2' and this time keep the money in a neighbouring feeder account such as Halifax Web Saver. You could then expect about 6% on £3,000 since this would be made up of 7% on an average £1500 and 5% on an average £1500 .

[With Abbey I think taking the money and running would be the better option]

grumbler

I completely agree with Walletwatch in regard to 'fair' or 'unfair'.

Milarky wrote:

It would be nice indeed if you could even transfer the proceeds of the account to an equivalent Halifax Monthly Saver - which pays pretty decent interest - on which to add subsequent monthly amounts but -alas- you cannot.

I did this. And you can. I do not see any essential difference between Halifax and Abbey.

bazhance

Hi all thanks for all of your comments , only after i posted my question did I see that it was already covered.I got £78 in interest.But it is always difficult to know if you are getting the correct interest or if borrowing are being charged the correct amount.So a site with some form of ready reckoner where you could put in the details and get an approx answer would be good.Or perhaps I should learn how to use excel

ED

Glad we were able to help you, bazhance.

Post #3 from me suggested gross interest of approximately £90 before tax, so I guess this tallies with the £78 you received.

Halifax have lost out to a competitor re my family member's funds that were 'regurgitated' from year 1 Regular Saver to Web Saver. The £3,078 capital + net interest have now been fed into Derbyshire Bdg Soc + other monthly savings accounts, earning 5.85% - 8% gross, compared with Halifax WS rate of 4.90%.