Are Regular Savers still worth it?

dlevene

I think there are some crossed wires here: Regular Savers are worth it if you, er, want to save regularly, but the full question being raised is whether its worth drip feeding a lump sum into Regular Savers.

InMyDreams

dlevene wrote: »

I think there are some crossed wires here: Regular Savers are worth it if you, er, want to save regularly, but the full question being raised is whether its worth drip feeding a lump sum into Regular Savers.

Yep, this is my point in post 16. The question being raised by the OP and being debated on this thread is not the question asked in the subject heading. In answer to "Are regular savers still worth it?", there is no debate that regular savers ARE worth it when being used for what they were intended. Whether it is still worth exploiting them in the manner popular by users of this board is what this thread is really about. The subject title should have been more specific to have avoided confusion.

oldfella

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.

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I would go further - he should put it into a RS that pays 7% or more if it extends over more than 1 year, or he should choose a 1 year account that pays the best rate he can find - preferably more than 10%.

IMHO a multiple year account paying 7 or 8% is a better choice than most 1 year RS.

stphnstevey

Special_Saver2 wrote: »

Hi everybody. I was thinking about writing a post just like this actually and was going to check whether people had discussed it before.
I am planning on including a section on the best feeder account (which would appear to be the Sainsbury's account)

Martin's articles on best savings accounts probably covers this (for RS or just to stash your cash).

Not up on this but thought ICICI and IceSave were some of the best

moneyandmountains

To summarise the discussion so far.

1) Regular Savers are generally worthwhile if used purely for regular savings funded from income.
However, the usual caveats about choosing a good current account, and not just one for the regular saver should probably apply.

2) If applying the MSE Savings Fountain i.e. drip feeding the regular saver from existing savings, then regular savers of less than 8% are probably not worthwhile. In fact, people may actually be losing out compared to a savings account [strike]/ fixed rate bond.[/strike]

Since dripfeeding is on the main article part of MSE
i.e.
http://www.moneysavingexpert.com/savings/best-regular-savings-accounts
then newcomers are likely to read that first.

Unless there is a clarification to the article, or perhaps a nifty regular saver calculator then people following the advice in the 'got more cash to save' part of the article may lose out.

YorkshireBoy

moneyandmountains wrote: »

2) If applying the MSE Savings Fountain i.e. drip feeding the regular saver from existing savings, then regular savers of less than 8% are probably not worthwhile. In fact, people may actually be losing out compared to a savings account / fixed rate bond.

Of course (hopefully) all that could change in November when (near) instant transfers will be possible.

www.fastpayments.co.uk

bristolleedsfan

YorkshireBoy wrote: »

Of course (hopefully) all that could change in November when (near) instant transfers will be possible.

www.fastpayments.co.uk

is it known how many building societies will be going over to that system ?

YorkshireBoy

bristolleedsfan wrote: »

is it known how many building societies will be going over to that system ?

I'm sure I've seen a list of institutions somewhere, and I seem to recall only 'banks' on it so far.

As an aside, it appears direct debits will stay with their existing 3 day cycle, meaning it may be better to 'push' money into savings accounts linked to a nominated external current account (via BACS) rather than 'pull' it in via DD (I'm thinking Icesave, who say at the moment it must be DD'd, for example).

Check out http://www.fastpayments.co.uk/overview.asp

RayWolfe

Sorry guys, this transfer delay thingy is a myth!
12 transfers at £250 loses the same amount as one transfer of £3K.
Just chose your time and don't have money in transit over a weekend.
Of course it will be better on October; big ones and little ones. Of course there is no loss if you are doing an internal transfer. Of course some people find MS too much trouble but the delay in transit is not a reason do do one or the other.

moneyandmountains

RayWolfe wrote: »

Sorry guys, this transfer delay thingy is a myth!
12 transfers at £250 loses the same amount as one transfer of £3K.

I'm not sure what you mean Ray. Was this directed at the original calculations, or a specific post?

The correct comparison for drip feeding is loss of interest
one transfer of £3k in vs + one transfer of £3k + interest out

vs no transfer in for remaining in standard savings account
(assuming no delay between standard savings / current account)