Halifax Regular Saver Maturity

arkwright_2

Recently my Halifax Regular Saver came to the end of the year, I have tried to give a way in which the interest was calculated in the simplest way - All the figures appear to match up down to the very last penny! I hope this helps someone.

The account was opened on the 3 April last year, with a standing order placed on the 3rd of each month, therefore:

03/04/2004 - SO - 250.00 - 365 - 15.000 --> (£250*365/365*0.06)
03/05/2004 - SO - 250.00 - 335 - 13.767 --> (£250*335/365*0.06)
03/06/2004 - SO - 250.00 - 304 - 12.493
03/07/2004 - SO - 250.00 - 274 - 11.260
03/08/2004 - SO - 250.00 - 243 - 09.986
03/09/2004 - SO - 250.00 - 212 - 08.712
03/10/2004 - SO - 250.00 - 182 - 07.479
03/11/2004 - SO - 250.00 - 151 - 06.205
03/12/2004 - SO - 250.00 - 121 - 04.973
03/01/2005 - SO - 250.00 - 090 - 03.699
03/02/2005 - SO - 250.00 - 059 - 02.425
03/03/2005 - SO - 250.00 - 031 - 01.274 --> (£250*31/365*0.06)
03/04/2005 -Int.- 077.82

---

(97.274) - 19.455 (Tax) == 77.82

If you calcualte how long each of the payments are in the account ie from the day entered to the day the account finishes you can calculate the interest by

Gross = sum of all deposits ... calculated by ... ((£amount)*(days in account)/365*(interest rate))
Net = Gross*0.8 (rounded down to the nearest penny)

Milarky

Forgive my ignorance on this, but are we saying [has it been said in another thread I may have missed?] that

i) when your account matures the proceeds are swept into another account ? [this is my understanding] on the maturity date

ii) your Halifax Regular Saver, although swept of balance, remains an active account and that they allow you to resume making payments into it and it then attract the currently offered rate of 7%? [I had assumed you had to apply for a new account and the old one was closed on maturity]

iii) [amending the SO date] if you have to make one [and only one] credit per calendar month then if could close your account and open a new one you could bring the SO forward to the same day BUT if you keep the account after sweeping you cannot credit in the same calendar month can you?

Thanks in advance

Kazza242

lipidicman wrote:

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!

Ok, chill. :beer:

See that's what I don't like about Halifax. Too many of their staff don't know what they're doing. They frequently wrongly advise customers and who suffers as a result...the customer.

Oh well, what's done is done. If they reject your SO payment, then I would complain if I were you. The manager who advised you not to alter your SO will probably do something to rectify the situation. Good luck with it.

bazhance

Hi, I also had a regular savings 6% a/c with halifax,once the 12th payment of 250 went in I stopped the standing order as I assumed that this a/c only ran for 1 year, the money was then swepted into a low interest instant access a/c.I tried to transfer this out via the web but that is not allowed,the only way I managed to get my own money back was to go to a branch and close the a/c and get a cheque.I thought that was that but today I received a letter saying that as I have missed a payment its been closed and everything has been transfered to another a/c.So as you can imagine they will not get my custom again.

deemy2004

So to summarise (which is something the Halifax should have done !).

1. Twelve payments ONLY into the monthly saver, totally £3k
2. At maturity the cash+interest is swept into the websaver account.
3. After Maturity a NEW FRESH Monthly saver begins at 7%, where the next S/O counts as the first deposit IN the month of maturity of the previous Monthly Saver !

SO for people who have changed their S/O to the start of the month, after the 11th S/O goes out of the account, they would need to ensure that they change THE DATE of the NEXT S/O TO AFTER The DATE of Maturity..

I.e. Say your account matures on May 22nd 05,
After your 11th S/O goes out on say 5th April 05, you change the date of the NEXT S/O to the 24th of MAY 05 onwards.

Halifax get 0/10 for keeping their customers informed of what to do at maturity and in poor training of their staff in the understanding of the products they are selling !

lipidicman

Deemy, your summary is correct (and what I thought I should do - so I checked and was told not to worry about changing the SO date! So for me, this is -10/10)

Hopefully this post will help others avoid the same problems!

lipidicman

Arkwright - Im going to be careful here (because my calculations didn't come out to the penny) but this method should not work IMHO. You cant take the AER and divide by 365 to get a daily rate. The AER includes compounding, ie the daily rate is lower than you calculate, it is 1.06^(1/365) not 0.06/365

arkwright wrote:

03/05/2004 - SO - 250.00 - 335 - 13.767 --> (£250*335/365*0.06)

However I note that the halifax quote their rate as 7.07% AER/7.00% gross p.a
My understanding is that if the interest is paid annually then the gross rate equals the AER

I guess it is related to this condition from http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=130&a=1467

Guidelines to AER calculations
In order to ensure consistency of calculation and fair comparison of products, the AER should be derived on the following basis:

A1 The only changes to the amount deposited to be taken into account are those that are required by the terms of the account. So, for example, on an account from which withdrawals may be made, the AER calculation is based on an initial deposit with no subsequent movements. On the other hand, on a monthly savings account, each monthly deposit is taken into the calculation. If certain deposits are required to qualify for a conditional bonus, then the AER including conditional bonus must be calculated assuming that the necessary deposits have been made.

So I am a little lost and maybe 0.07/365 will work in this case whilst taking the AER as 7.07 and doing 1.0707^(1/365) doesn't. I really thought I had interest rates sussed but this AER on a monthly saver account has really got me!

lipidicman

Ok the latest SO has arrived and has not been rejected (yet)

To explain, I was told in branch not to amend my SO date - so my account went to £3250 and was then emptied. Rather than have the account sit empty for nearly a whole month I then changed the SO date to be a day after maturity. The £250 has arrived and has not been rejected (yet). It could be as I have made two payments in one month (albeit with the account being emptied inbetween)*

*with this knowledge I recommend (that people who pay their SO in earlier than their initial payment) amend their 12th SO to after the maturity date for one month and then move it back to the start of the month to avoid this particular possible pitfall

lipidicman

I was too trusting of Halifax. The PAYMENT has been REJECTED
Now I have to go into branch and have another discussion with the Manager about how nobody at Halifax has any idea of how their products work. I have done my best to find out, including posting here on the matter, phoning the regular saver helpline, and even confirming it with the manager and assistant manager at my branch.

I am going to get him to close the account and open a new regular saver for me!

So let this be a warning to anyone else :
People who pay their SO in earlier than their initial payment MUST amend their 12th SO to after the maturity date for one month (and then move it back to the start of the month) to avoid this pitfall

Leia_Stephens

lipidicman wrote:

So let this be a warning to anyone else :
People who pay their SO in earlier than their initial payment MUST amend their 12th SO to after the maturity date for one month (and then move it back to the start of the month) to avoid this pitfall

Thank you for this info, lipidicman .

Just to confirm (because I am feeling dense ): my initial payment was on 22nd June, should my 1st SO after my anniversary date be on 1st July .

Leia