Help, I can’t get my head around a Martin Lewis regular saver recommendation.

smjxm09

I watched his ITV show on Monday where he mentioned Leeds BS regular saver paying 2.3% and how regular savings are calculated. i.e A headline figure of 2.3% is actually 1.15% over 12 months.

So back to the Leeds Regular Saver. This is a 12 month bonus account that has already started and ends August 31st 2017. First payment is by cheque which won’t clear until December so this is now a 9 month product.

If it had run for 12 months in the first month it would attract interest at 2.3% but by starting it now it is starting at 1.7%. Is that correct??? In month 6 that payment would attract 1.15% and in month 12, as far as I can work out the final payment would attract 0.19% interest.

So if I was getting say 1.5% in another account is it worth topping this account up once the monthly gain drops below 1.5%? As each month adds 0.19% by January the interest rate is already hovering around the 1.5% mark (0.19% x8=1.53%).


I can't see this account working for me so I am thinking about cancelling it.

[Deleted User]

The money will attract 2.3% APR at all times, based on your daily balance.

chockydavid1983

The interest rate doesn't change if the length changes.
You get 2.3% on all the money in there at any given time.

ChesterDog

The interest rate is 2.3% PER ANNUM on all the money deposited in it.

Money sitting in it for less than a year will grow by a proportionally smaller amount, but the RATE of interest is unaffected.

ChesterDog

chockydavid1983 wrote: »

The interest rate doesn't change if the length changes.
You get 2.3% on all the money in there at any given time.

Your last sentence is what causes confusion - by 2.3%, you actually mean 2.3% per annum.

Rollinghome

smjxm09 wrote: »

So back to the Leeds Regular Saver. This is a 12 month bonus account that has already started and ends August 31st 2017. First payment is by cheque which won’t clear until December so this is now a 9 month product.

I don't have the account but from what I can see it doesn't have a fixed period as you seem to think but instead has a fixed balance limit of £6k. It says (http://www.leedsbuildingsociety.co.uk/savings/access-accounts/regularsaver/) "The RegularSaver (Issue 4) has no fixed term".

The wording is confusing but I assume that as long as you meet the conditions including staying under £6k then you get 2.3% until they kill off the account. The date of 31 Aug is when interest is paid and you'll get 2.3% pa calculated on your daily balance. That's my take on it.

chockydavid1983

Jesu Christingo!

IanManc

smjxm09 wrote: »

I watched his ITV show on Monday where he mentioned Leeds BS regular saver paying 2.3% and how regular savings are calculated. i.e A headline figure of 2.3% is actually 1.15% over 12 months.

No it isn't.

So back to the Leeds Regular Saver. This is a 12 month bonus account

No it isn't.

that has already started and ends August 31st 2017. First payment is by cheque which won’t clear until December so this is now a 9 month product.

No it isn't. The account does not have a specified end date.

If it had run for 12 months in the first month it would attract interest at 2.3% but by starting it now it is starting at 1.7%. Is that correct???

No it isn't. The money earns at a rate of 2.3% per annum all the time it is in the account.

In month 6 that payment would attract 1.15% and in month 12, as far as I can work out the final payment would attract 0.19% interest.

No. The money earns at a rate of 2.3% per annum for as long as it is in the account.

So if I was getting say 1.5% in another account is it worth topping this account up once the monthly gain drops below 1.5%? As each month adds 0.19% by January the interest rate is already hovering around the 1.5% mark (0.19% x8=1.53%).

No it isn't. The interest rate is 2.3% per annum throughout the time the money is in the account.


I can't see this account working for me so I am thinking about cancelling it.

I don't think you understand the account. If you want an account that pays 2.3% interest per annum on money in the account then it is for you. If you don't, then it isn't. But you'll struggle to find many savings accounts that pay more than 2.3% per annum at the moment.

smjxm09

Thanks everyone. I was getting myself confused.

Nationwide8

I've found the easiest way to do it is to use Martins Regular Saver calculator...you put in how much you will save a month for how many months at whatever annual rate and it will give you annual interest.You can then decide if that interest amount is worth it compared with other accounts you could put money into.

bigadaj

I still can't seem to find these accounts that pay interest on money you haven't put in as yet, can anyone point me in the right direction?