Regular Saver Best Time to open / deposit for optimum interest

bongoali

Hello All,

Is there a best time to open a RS and best time to make the monthly deposits in terms of maximizing interest?

I am planning on opening a few and think that as the term is 12 months from opening, that it doesn't matter what day you open / deposit on as long as you make the 1st deposit as soon as you open.

Thanks if any of the experts can help ! :T

Cornucopia

The best time to open an account that pays more interest than you are presently earning is...

... as soon as possible.

You will want your paying-in day to be a reasonable distance from the opening day, to allow for bank holidays interfering with future standing order payments. I would suggest leaving 10 calendar days.

With these accounts, the amounts involved are so relatively small that a few days' interest here and there will probably make very little difference (indeed, the Santander account actually states the amount of interest due after a year in the small print).

You can generally only open one of each lender's RS accounts, BTW.

bongoali

CC thanks for the fast response! :A
Yup appreciate a few days won't make a huge different but we've opened up about 15 current accounts and going for it big time with the regular savers across the various banks.

Sorry if I'm being a bit dense but I don't understand this point you made:
"You will want your paying-in day to be a reasonable distance from the opening day, to allow for bank holidays interfering with future standing order payments. I would suggest leaving 10 calendar days"

Is it possible to explain this a bit more please? TIA :T

Cornucopia

You will be setting up a Standing Order to make the regular payment into these accounts.

The rules vary between banks, but there are generally two things you need to be aware of:-

1. When the due date of a Standing Order falls on a weekend or bank holiday, the payment date gets pushed forward to the next banking day. In the case of Christmas and Easter, the due date can vary by 5 or 6 days.

2. The receiving bank will have rules about when each month's payment can be made, and whether missed payments can be made up. It's simpler to put the payment date in the middle of the savings account's month to avoid any problems due to shifting dates of standing orders.

LXdaddy

Some regular savers work on a monthly period based on the day of the month the account is opened. Others work on a calendar month.


All set a limit on how much you can add in each "month". Clearly, the earlier in the "month" that you make the deposit the better.


For those accounts that use the calendar month it is advantageous to open and make your first deposit late in the calendar month and then make subsequent deposits early in the calendar month. That way you actually get 13 payments in during the year and you have two payments in for "almost" a full year.


The thing about timing of the standing order is that you want to make sure that the actual payment falls into the correct month. So you have to understand what the bank defines as their month and then make sure that the standing order hits within the first few days of that (and not in the last few days of the previous.) Standing Orders don't normally get sent early - but if your bank sends one due on a weekend on the previous Friday you might get caught out.

bongoali

Thank you for your reply LX

LXdaddy wrote: »

Some regular savers work on a monthly period based on the day of the month the account is opened. Others work on a calendar month.

Any ideas on the best way to find this in their T&Cs please?
I am looking at Santander, Nationwide, TSB and Lloyds for now

LXdaddy wrote: »

All set a limit on how much you can add in each "month". Clearly, the earlier in the "month" that you make the deposit the better.

Understand

LXdaddy wrote: »

For those accounts that use the calendar month it is advantageous to open and make your first deposit late in the calendar month and then make subsequent deposits early in the calendar month. That way you actually get 13 payments in during the year and you have two payments in for "almost" a full year.

Understand, so for e.g. 30th April = 1 and then 1st May/Jun/Jul/Aug/Sep/Oct/Nov/Dec/Jan/Feb/Mar/Apr = 12 which is 13 payments!

LXdaddy wrote: »

The thing about timing of the standing order is that you want to make sure that the actual payment falls into the correct month. So you have to understand what the bank defines as their month and then make sure that the standing order hits within the first few days of that (and not in the last few days of the previous.) Standing Orders don't normally get sent early - but if your bank sends one due on a weekend on the previous Friday you might get caught out.

Not sure I get this. If I set up a standing order for 1st of the month then if it's a few days late because of weekends or bank holidays then no problem... it's won't be delayed by +30 days will it?

bongoali

Cornucopia wrote: »

You will be setting up a Standing Order to make the regular payment into these accounts.

The rules vary between banks, but there are generally two things you need to be aware of:-

1. When the due date of a Standing Order falls on a weekend or bank holiday, the payment date gets pushed forward to the next banking day. In the case of Christmas and Easter, the due date can vary by 5 or 6 days.

2. The receiving bank will have rules about when each month's payment can be made, and whether missed payments can be made up. It's simpler to put the payment date in the middle of the savings account's month to avoid any problems due to shifting dates of standing orders.

Thanks CC but if you open up a RS say on the 1st of the month, and set up a SO for same day.. it can't get delayed by +30 days can it so will always hit the month.

bongoali

Sorry another question.. can you fund a RS by a single deposit from a current account with a different bank and different name on the account?

badger09

On a slightly different note, if you're planning to open several Regular Savers, I would stagger them so that they don't all mature at the same time.

That's assuming you're not saving for something specific in approx 12 month's time;)

Rollinghome

LXdaddy wrote: »

For those accounts that use the calendar month it is advantageous to open and make your first deposit late in the calendar month and then make subsequent deposits early in the calendar month. That way you actually get 13 payments in during the year and you have two payments in for "almost" a full year.

Clearly the sooner you transfer as much as possible from a low paying account to a higher paying one the better. But if you keep your dosh in your 0.5% account for several weeks until the end of month before transferring to the 5% one, because that's the "optimal time", then you'll also have lost interest.

bongoali

Rollinghome wrote: »

Clearly the sooner you transfer as much as possible from a low paying account to a higher paying one the better. But if you keep your dosh in your 0.5% account for several weeks until the end of month before transferring to the 5% one, because that's the "optimal time", then you'll also have lost interest.

Fair point, thanks RH. I was actually after the info LX provided as most of my cash is in 4-5% accounts. So both good replies, cheers