Halifax Regular Saver Maturity

lipidicman

I have been discussing a thorny little problem with the Halifax Regular Saver at the end of another discussion so I thought I would summarise it in a new post. The information should be useful for those of you waiting for your accounts to mature, especially if like me you have found that the staff are poorly informed about this account.

The problem is that you open with £250. Then if you put the SO's in earlier in the month (than your opening payment, mine was opened at the end of the month but my SO is early in the month to tie with my salary) you will end up with 12 SO's going in (if they are set up as ongoing and you dont cancel the last - I was told this was not necessary so left it) - therefore your balance will be £3250 (but as I calculate below you dont seem to get interest on the last £250, although it is hard to calculate to the penny! I suspect you may not get interest on anything over £3k, although you should with compounding - I will check this out later)

Also the whole £3250 plus interest was cleared out leaving the account empty (contrary to what I was told - that the last £250 would remain).

So, if I leave things as is then my new 7% account, that I have been eagerly waiting for, will sit empty for nearly a whole month (until my next SO on the 5th). So I have amended my external SO to pay in tomorrow and I will then change it back to the 5th. Halifax have told me that this is OK (even though I made a payment this month as that has been swept out - I hope this is a rare piece of correct information from Halifax) If I leave it empty for a month I would effectively cut nearly 1/12 off the interest rate. Dont let Halifax reduce your interest rate!

Here is the interest calculation I did

I did the calculation of the interest (iteratively including the fact that the opening £250 balance was only for 8 days and the last £250 was only in there for 8) and I made the interest £80.30. I actually got £79.74. Assuming the last £250 doesnt attract interest corrects this (the first calc below assumes it does, if you assume it doesnt you use the second calc and get £80.05 which is close enough)

For those that are interested at 6% I first worked out a monthly rate (assuming months are equal length, I know they are not)

1.06^(1/12)=1.004868
using this as a monthly multiplier,m

opened (13th)--interest adding (on SO day, the 5th)
250

---

250.7844123____(250*m^(20/31)) ie 20 days
500.7844123---503.2220057____(500.78*m) I didnt round in the spreadsheet
753.2220057---756.8883519
1006.888352---1011.789432
1261.789432---1267.931256
1517.931256---1525.319863
1775.319863---1783.961322
2033.961322---2043.861732
2293.861732---2305.02722
2555.02722----2567.463944
2817.463944---2831.178092
3081.178092---3096.175882
3346.175882---3350.371586____(3346.18*m^(8/31) 8 days later on the 13th

interest

---

100.3715861
net (x0.8)

---

80.2972688 = £80.30

assuming the last £250 attracts no interest the last line of the table is:

3096.175882 3100.058116
(interest earning balance is 3096.18)

interest 100.058116
net 80.04649281 = £80.05

close enough to what i received (£79.74) for me

Hope this helps. If anyone else has had a similar experience then let me know

Walletwatch

Had a similar problem with the Abbey regular saver, where they actually told me that it was a feature that if you made your initial payment before the twentieth, and set up an SO for a date before the 20th of the month, you could end up with overall deposits of 6500, instead of £6000. To my shock, I received a letter a couple of months later that since I'd had two payments going in the same month, if I did not withdraw one of them immediately, the account would be downgraded to a Web saver, earning around 5%(not too bad, but I was misguided by THEM in the first place!!!)

Needless to say, went and got it sorted at the branch, but had to withdraw the extra deposit nevertheless.

lipidicman

I assume you mean you opened on something like the 19th of say, feb. And the SO for the 2nd of march?

So Abbey count this as the same month (ie within 30/31 days)? Halifax clearly use CALENDAR months as they never told me there was a problem.

I might have a problem this month as I paid into the 6% saver on the fifth and I have paid into my new 7% saver (the same account and roll number) today. However, I should have been told to stop the first SO when I asked in branch. Also, since that payment has been swept out, I am hoping that this payment will be accepted

Halifax really do need to think this account through and make it clear what will happen on maturity. You go in branch and they say you should phone up. You phone up....you select the 'regular saver' menu option...you explain the problem....the operative say 'I'll just go and speak to someone in the regular saver section'....doh, what do you have to do to speak to somebody who knows?????

monki_man

Agreed. To be honesty a lot of the banks are like Halifax, unorganised and pass the buck to someone else hoping they could get away with it. I find it very frustration that for people wanting to find out about a product they have got, they call a 0800 number and for existing customer we usually have to pay national or local rates. I dont mind this however when you make calls consistently to try and find out whats happening with your money it can be an issue.

lipidicman

Well, my SO has left my bank - I will let you know if there are any problems with Halifax. Hopefully this might help other MSE'ers

Walletwatch

lipidicman wrote:

I assume you mean you opened on something like the 19th of say, feb. And the SO for the 2nd of march?

So Abbey count this as the same month (ie within 30/31 days)? Halifax clearly use CALENDAR months as they never told me there was a problem.

No, I think Abbey also go by calendar months. I opened my account on the 10th and set up SOs for the 17th of every month. That meant I had two payments go out the first calendar month

lipidicman

Ok, that is obviously wrong (but not your fault, if they told you to do it!)

deemy2004

Walletwatch wrote:

No, I think Abbey also go by calendar months. I opened my account on the 10th and set up SOs for the 17th of every month. That meant I had two payments go out the first calendar month

Should have been first S/O on the 17th of the following month.

With the Halifax is best to change your S/O to AFTER the maturity date after the 11th S/O has gone out of your account i.e. with £3k on deposit.

lipidicman

Yes deemy, I know that now - but the manager told me that the last SO (ie the one that took it to £3250) would be fine as it was and that the £250 would stay in on 'sweep day'. I just hope my amended SO, ie today and the '12th SO', ie last week, dont flag up as two payments in one month - or there will be hell to pay!

Kazza242

What Demmy said above is exactly what I did earlier this month. I changed my SO from the 4th to the 8th, as my Halifax regular saver was due to mature on the 7th. My first £250 SO at 7% went in without a hitch on the 8th. I've changed my SO date to earlier in the month.

lipidicman

As I said to Deemy, I asked the Halifax if I should do that Kazza, but they said NO!!

Hopefully all will be well, except if they reject the replacement of the £250 today! If they do, somebody will pay!