Are Regular Savers still worth it?

InMyDreams

Special_Saver2 wrote: »

Funnily enough, I was thinking the other day that I should really open up one of these £250 per month, 12 month savers in March or April - that way my account would mature with £3,000 on the 1st April each year which I could then slip directly into an ISA on 6th April!

And as of next April, you'd even be able to squeeze the interest you'd earned on the saver in with it too.

RayWolfe

Special_Saver2 wrote: »

Info addict, I have added the Principality BS regular saver to my thread. It is not clear to me from the website whether this has to be opened up in a branch or whether you can do it by post. Can you tell me from your own experience? I also cannot see anything on the website saying that you have to live in Wales to open up an account so I am assuming there are no geographical limitations but please let me know if you know otherwise.

Yes you CAN open this by post and you [EMAIL="DON@T"]DON'T[/EMAIL] have to live in Wales.

YorkshireBoy

sav4it wrote: »

I don't understand.Are rules changing next April?

Regulation 6

From 6 April 2008 the overall subscription limit for the ISA will increase to £7,200 of which up to £3,600 can be subscribed to a cash account. And there will be additional flexibility as the investor can decide for themselves the balance of their investments provided they keep within the £3,600 cash limit and the £7,200 overall limit. So investors could subscribe £2,000 to a cash account and £5,200 to a stocks and shares account, which previously could only have been achieved (subject to the former £7,000 limit) by using a maxi ISA. The £3,600 and £7,200 limits are amounts that are easily divisible by 12, which is something that managers have requested.

http://www.hmrc.gov.uk/isa/bulletin38.htm

info_addict

Special_Saver 2. The Principality BS Monthly Saver can be opened by post and you don't have to be a resident in Wales. It is a passbook account, if you require updates you would have to post your book off.

dlevene

On the question on whether Regular Savers are worth it, am I right in believing their interest rates do not follow rate rises with the same regularity as normal savings accounts?

If so, then as rates are adjusted in the coming weeks, the gap will close even further. We shall see...

oldfella

On the question on whether Regular Savers are worth it, am I right in believing their interest rates do not follow rate rises with the same regularity as normal savings accounts?On the question on whether Regular Savers are worth it, am I right in believing their interest rates do not follow rate rises with the same regularity as normal savings accounts?

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usually yes - Loughborough (no longer available) is unusual in having a guarantee, and there have been a few isolated increases like YBS

Mike

bristolleedsfan

oldfella wrote: »

On the question on whether Regular Savers are worth it, am I right in believing their interest rates do not follow rate rises with the same regularity as normal savings accounts?On the question on whether Regular Savers are worth it, am I right in believing their interest rates do not follow rate rises with the same regularity as normal savings accounts?

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usually yes - Loughborough (no longer available) is unusual in having a guarantee, and there have been a few isolated increases like YBS

Mike

interest rate rises are not guaranteed on any savings accounts bar those that have an interest rate guarantee eg like u said loughborough, savings providers look at two aspects when deciding whether to pass on base rate increases ( and how much to pass on) the base rate increase itself and market conditions. ( eg on 1st june 2007 nationwide didnt pass on full 0.25% increase on its instant access isa accounts)

if some ongoing regular savers have been run as loss leaders, then people shouldnt be suprised if these accounts dont always get full 0.25% rate passed on every occasion of 0.25% base rate increase.

Beate

I don't understand how Regular Savers cannot be worth it. Let's say I get my monthly salary into a HSBC account. I can afford to save £250 a month. I put it into the HSBC Regular Saver which pays 8%, which is about the same as 4% on the £3,000 lump sum from the start. However, I haven't got it as a lump sum. I have my other savings tucked away in saving accounts paying around 6%, and what I want to do is save £3,000 a year to be able to put it into an ISA. Where else would I put it than in a Regular Saver? If I squirrelled the same amount away every month into my 6% saving account, I would effectively only get a rate of 3% on the lump sum, wouldn't I, as I am drip-feeding? I understand that Regular Saver rates don't seem to catch up with the rate rises as fast as savings accounts do, but as long as they are still higher than the savings accounts rates, they should be best for drip-feeding, no? Is there something I don't understand here?

oldfella

Is there something I don't understand here

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the problem is that you can often only save £250 per month, limited to 1 year, and where the rate is only say 1% higher than a normal savings account the benefit taking into account the hassle and the loss of interest while cash is in transit, is just not worth it.

also some RS are linked to current accounts - if your money is not in the account at the right time you will be hit with charges

Mike

YorkshireBoy

oldfella wrote: »

the problem is that you can often only save £250 per month, limited to 1 year, and where the rate is only say 1% higher than a normal savings account the benefit taking into account the hassle and the loss of interest while cash is in transit, is just not worth it.

Mike, whilst what you say may be true for drip-feeding from an existing lump sum, I think Beate's point is that, say, if he can afford to save £250 per month he may as well put it in an 8% account as a 5% account.

Yes, he'll lose interest whilst the money is in transit, but he'd lose this wherever he sent his monthly savings (from income) to - assuming of course that his ordinary savings account is not linked to the current account receiving his income.