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Santander 123 or Lloyds Club Monthly Saver?
DaveF13
Posts: 8 Forumite
I currently save £260pm into a Club Monthly Saver from monthly income. I was wondering if it was worth it (would I gain more interest) if I moved a further £140pm from a Santander 123 account each month for the remaining 10 months of the regular saver.
As it is at 4% I presume I would but the 123 account pays interest monthly and I would have to wait 10 months for the regular saver to pay out, so I'm not sure.
No doubt this is dead simple but I can't get my head round it.
As it is at 4% I presume I would but the 123 account pays interest monthly and I would have to wait 10 months for the regular saver to pay out, so I'm not sure.
No doubt this is dead simple but I can't get my head round it.
0
Comments

The 3% and 4% are AERs  annual equivalent rates. The purpose of AERs is that people can compare rates on a likeforlike basis.
£1,400 in a 123 account will make £28 over 10 months (assuming you don't need to take off the £2/mth charge) for a BR tax payer.
If you dripfeed £140 into the 4% account, you will have £33 after BR tax at the end of the 10 months.0 
Thanks for the help. So the regular saver is better, as I expected given it's 4% against 3%
Still don't understand how you calculate it though.0 
Still don't understand how you calculate it though.
Archi has given you roughly* what you'd make at Santander...
£1,400 x 3% / 12 x 10 x 0.8 = £28
Where 0.8 is the basic rate tax multiplier
And the second figure of £33 is derived from an average interest rate of (a little over) 3.5%, as you're drip feeding from a 3% account into a 4% account...
£1,400 x 3.5% / 12 x 10 x 0.8 = £32.66
* He's used the AER of 3% even though you're not saving for a year.0 
Both is best0

Even if you don't understand the maths, you can still use the MSE Regular Saver calculator. I don't have a link to hand, but typing exactly that into google brought it up for me before.0

You can't do it in quite the way you suggest, though. The T&Cs of the Lloyds Monthly Saver say that 'you can only pay in once a month by standing order'.
What you would have to do is transfer the £140 to your Club Lloyds current a/c and up the SO to £400.0 
You can't do it in quite the way you suggest, though. The T&Cs of the Lloyds Monthly Saver say that 'you can only pay in once a month by standing order'.
What you would have to do is transfer the £140 to your Club Lloyds current a/c and up the SO to £400.0 
Where did you find the clause that says it must be just one monthly payment? I can't see that is spells out that you can only pay in one single amount a month.
Also, Lloyds couldn't possibly tell whether the money comes via SO or FP if it comes from a nonLloyds account. So whilst talk about "a Standing Order" might imply one SO, it is actually quite meaningless IMO.
Having said this, I haven't tried either  my monthly £400 comes by SO from my Club Lloyds0 
Archi_Bald wrote: »Where did you find the clause that says it must be just one monthly payment?You can make as many withdrawals as you like into your Club Lloyds current account, but you can only pay in once a month by standing order...
http://www.lloydsbank.com/savings/clublloydsmonthlysaver.asp0 
http://www.lloydsbank.com/savings/clublloydsmonthlysaver.asp
"You can only pay in once a month by standing order.."
I fund mine and my ordinary Lloyd's regular saver with a SO from a Nationwide account. I have funded a previous Lloyd's regular saver this way. You're right that they can't tell the difference between a SO and a FP as SO are really future dated FP and show as an incoming FP when received in the regular saver.0
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