Regular savings query

MoneySavingTart

Mrs Moneysavingtart is about to get her state pension and we are considering putting it away by using regular savings schemes, specifically the 1st direct and M&S who both offer 6% (fixed for 12months)
I have yet to find a guide as to what happens after the 12 months? OK the rate might just become variable, which I could cope with or it might plummet which I would want to avoid.
Other non regular savings with fixes tend to be a (low) basic rate plus a bonus for the 1st 12 months but neither first direct or M&S express their rates in this way.

Can anyone shed any light on the way these accounts work from experience please?

TIA
MST

Ballard

I have one at First Direct. After the 12 months is up the funds are transfered to a standard savings account (or perhaps the account becomes a standard savings account. I can't quite remember). You should then move the money to a more useful account and open a new regular saver. You may have to wait a day or two for their system to accept that you don't already have the regular saving account.

MoneySavingTart

Thank you Ballard.

Generally speaking are the subsequent regular savings account still at a premium rate or are they just trying to hook new customers with premium 1st time rates?

TIA
MST

alanq

Ballard wrote: »

I have one at First Direct. After the 12 months is up the funds are transfered to a standard savings account (or perhaps the account becomes a standard savings account. I can't quite remember).

If a suitable savings account exists then the former otherwise the latter. In either case the interest rate is derisory.

alanq

MoneySavingTart wrote: »

Generally speaking are the subsequent regular savings account still at a premium rate or are they just trying to hook new customers with premium 1st time rates?

New regular savings account rates are the same for new customers and existing customers who have just had an account mature. However, the good rate only applies for the 12 months that the account is receiving monthly contributions.

MoneySavingTart

Thank you AlanQ

Much obliged for speedy responses.

Anyone got experience of the M&S offering? Does it work similarly please.

As both accounts need a current account setting up in parallel to feed the savings, I'm just trying to make sure the effort will be worth it.

MST

steelbru

You could always try looking at the M&S Regular Savings website which is what I've just done in 30 seconds........

http://bank.marksandspencer.com/banking/current-accounts/existing-customers/#monthly-saver

"After 12 months, if you have an M&S Everyday Savings Account, we’ll transfer your balance into that account. If you do not have an M&S Everyday Savings Account, we’ll transfer your balance into your M&S current account."

MoneySavingTart

Thanks. Most of my trawling for info was on 1st Direct. I should have spent that extra 30seconds going to M&S.

From under my stone

MST

MARTYM8`

The HSBC, First Direct and M&S bank 6% regular savers all work basically the same way – although FD allow you to pay in £300 a month rather than £250. You can invest up to that sum each month – but its rolling e.g. if you only invest £50 in month 1 you can invest £450 the next (M&S/HSBC) or £550 with FD.


On maturity at the end of the 12 months the funds are either paid into another savings account you have with them or your current account if you have no other easy access savings.

And the day after maturity you can open another 6% regular saver for another year.

I find them useful to build up funds for my ISA – and then on maturity in March I pay them into my ISA to use my allowance.

Also FD and M&S offer £100 switching incentives if you switch accounts – no conditions bar paying in £1000 to FD within 3 months. Because you need current accounts to open the regular savers you might as well take advantage of those offers.

Would certainly recommend them – but M&S is a bit tricky internet banking wise as you always need their little secure key to login. Bar that they are all effectively the same platforms.

MoneySavingTart

I think I need to open a couple of sacrificial bank accounts to make use of those switching incentives.
I'm quite happy with my everyday current account and don't want to switch that one.

MST

bigadaj

Wouldn't deferring the pension give you a higher overall return on the amount?